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Euro US dollar (EUR/USD) wavers amid data lull

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Euro US dollar (EUR/USD) fluctuates amid absence of data

The euro US Dollar (EUR/USD) exchange rate is trading without a clear direction this afternoon amid a lack of fresh data.

At the time of writing the EUR/USD exchange rate is trading at $1.0825, virtually unchanged from this morning’s opening rate.         

Euro (EUR) buoyed by rate cut push back

The euro (EUR) is mixed this morning amid a lack of macroeconomic releases from within the Eurozone.

With fresh data in short supply, soft push back against European Central Bank (ECB) monetary loosening from major EU analysis services to buoy the single currency.  

Dr. Alexander Glas, Project Leader of the ZEW Financial Market Survey, commented:

‘Most respondents expect the ECB to cut rates in September and December 2024. However, they do not foresee a linear downward movement of interest rates but rather phases during which the ECB Governing Council will keep rates at the level of previous meetings, in line with ECB President Christine Lagarde’s statements on a future data-driven approach to monetary policy adjustments.’

Meanwhile, post-election jitters across France continue to stymie EUR’s upside potential. While markets cheered the loss of Marine Le Pen’s far-right National Rally (RN), concerns of concerns of a political deadlock in the Eurozone’s second-largest economy deterred investor interest in the common currency for much of Tuesday’s session.

US dollar (USD) falters as Fed inches closer to rate cuts

The US dollar (USD) is struggling to attract investor support this morning in the wake of Federal Reserve Chair Jerome Powell’s latest remarks.

During his most recent Testimony yesterday afternoon, Powell noted the downside impacts that persistently high interest rates coud have on both the US labour market and wider US economy.

Addressing the Senate Banking Committee, Powell said:

‘After a lack of progress toward our 2% inflation objective in the early part of this year, the most recent monthly readings have shown modest further progress. More good data would strengthen our confidence that inflation is moving sustainably toward 2%. In light of the progress made both in lowering inflation and in cooling the labour market over the past two years, elevated inflation is not the only risk we face.’

Euro US dollar exchange rate forecast: Fed speeches in focus

Looking ahead, further commentary from Federal Reserve policymakers could fuel movement in the euro to US dollar exchange rate this evening. Fed hawk Michelle Bowman will speak concurrently with her dovish cohort Austan Dean Goolsbee. Opposing commentary may leave USD rudderless, given each policymaker’s traditionally opposing outlooks. However, signs of a hawkish consensus could lend the ‘greenback’ support against it rivals,

Looking to the Eurozone, the latest German inflation data is due tomorrow. Signs of sticky inflation in the Eurozone’s largest economy could see markets dialling back their ECB rate cut expectations, thereby lifting the common currency.