- Euro/US dollars raises sharply to nearly preliminary The PMI data has been strengthened for the month of January.
- The European Central Bank is expected to reduce the rate of deposit facilities by 25 bits per second to 2.75 % on Thursday.
- Trump’s call for immediate discounts of prices and his soft dialect to China has been greatly affected by the US dollar.
The euro/the US dollar is gathering near the 1.0500 psychological resistance in the European session on Friday, when Hamburg Commercial Bank (HCOB) stated that the first purchasing manager in the eurozone (PMI) has grown in January after shrinking in the past two months. The Flash HCob PMI report, which was collected by the S&P Global, showed that the total commercial activity expands. The complex purchasing managers index rose to 50.2 from 49.6 in November. Economists expected that the purchasing managers index will continue to decline, but at a slower pace to 49.7.
“The start of the new year is a moderate encouraging. The compound to the expansion lands.
The report also showed a strong demand for employment and new work in the services sector. Meanwhile, the manufacturing sector continues to experience workers’ demobilization and decline in new orders.
The optimistic PMI PMI has improved the euro appeal in the short term, but it is unlikely to fix its broad broad view on the backdrop of the Bets of the European Central Bank (ECB). The European Central Bank is scheduled to reduce the rate of facilities to deposit it by 25 basis points (BPS) to 2.75 % on Thursday and will continue to follow the process in the following three policy meetings because officials are confident that inflationary pressures will be sustainable to the required rate of 2 %.
Digest Market Mark: Euro Euros/US dollar with a decrease in the risks in the US dollar
- EUR/USD promote the risk of risk of US dollar (USD) significantly. The US dollar index (DXY), which tracks the value of Greenback compared to six main currencies, fell near 0.6 % on Friday and deployed the lowest level in five weeks near 107.45. The risk group of US dollars has reduced significantly, as the US President (United States), Donald Trump, has indicated that he could face a deal with China without using a customs tariff.
- The dollar has gained nearly 10 % since October, in part due to the market expectations that President Trump will impose a fatal tariff on its commercial partners shortly after his return to the White House. During the election campaign, Trump commented that if he wins, 60 % of the customs tariffs will be imposed on China and 25 % on other North American economies.
- President Trump said in an interview with Fox News on Thursday that he had a friendly conversation with Chinese leader Xi Jinping and could face a deal on commercial practices. Trump added that he prefers not to use definitions against China, but he called the definitions “tremendous force,” according to Reuters.
- In addition to Trump’s assumption of the introductory relaxation of China, his support for immediate interest rate discounts in his comments at the World Economic Forum (WEF) in Davos on Thursday had sent the US dollar on his background.
- To move forward, the main operator of the US dollar will be the Federal Reserve’s monetary policy, which will be announced on Wednesday. The Federal Reserve Certainly is to maintain interest rates unchanged within 4.25 % -4.50 %. Investors will pay close attention to the Conference of the Federal Reserve Chairman Jerome Powell to determine whether officials agree with President Trump’s opinions.
- In Friday’s session, investors will focus on the data of global procurement managers in the United States of America, which will be published at 14:45 GMT.
Technical Analysis: EUR/USD refreshes a monthly near 1.0500
EUR/USD will publish a new monthly highest near 1.0500 on Friday. The main currency pair is reinforced by the IMA’s main moving average, which is trading around 1.0456, on Monday. The husband has continued to attract bids since its decrease to its lowest level in the year 1.0175 on January 13.
The couple entered the path of upscale reflection after the outbreak of the highest level on January 6, 1.0430, which confirmed the difference in the price of the original and the 24 -day relative index (RSI). On January 13, RSI was a higher decrease, while making the pair the lowest levels.
If we look down, the lowest level on January 20 of 1.0266 will be the main support area of the husband. On the contrary, the highest level on December 6 of 1.0630 will be the main barrier of euro bulls.
Common questions euro
The euro is the currency of the 19 European Union countries belonging to the eurozone. It is the second most traded currency in the world behind the US dollar. In 2022, it represented 31 % of all foreign exchange transactions, with an average daily rotation of more than $ 2.2 trillion per day. EUR/USD is the most trading currency pair in the world, which represents an estimated 30 % of all transactions, followed by EUR/JPY (4 %), EUR/GBP (3 %) and EUR/AUD (2 %).
The European Central Bank (ECB) in Frankfurt, Germany, is the backup bank. The European Central Bank sets interest rates and runs monetary policy. The primary mandate in the European Central Bank is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary performance is to raise or reduce interest rates. Relatively high interest rates – or expect higher rates – usually benefit from the euro and vice versa. The Board of Directors of the European Central Bank is making monetary policy decisions at eight times a year. Decisions are made by the heads of national banks in the eurozone and six permanent members, including the President of the European Central Bank, Christine Lagarde.
The inflation data in the euro area, measured by a coordinated index of consumer prices (HICP), is an important economist for the euro. If inflation increases more than expected, especially if it is 2 % higher than the European Central Bank’s goal, then the European Central Bank is obliged to raise interest rates to return it in control. Relatively high interest rates usually benefit compared to its euro counterparts, as it makes the region more attractive as a place for global investors to stop their money.
Data ejaculates a measurement of economics health and can affect the euro. Indicators such as GDP, manufacturing, PMIS, employment services, and consumer morale surveys can affect the trend of uniform currency. The strong economy is useful for the euro. Not only is to attract more foreign investment, but the European Central Bank may encourage interest rates, which will enhance the euro directly. Otherwise, if economic data is weak, the euro is likely to decrease. Economic data of the four economies in the eurozone (Germany, France, Italy and Spain) are of particular importance, because it represents 75 % of the eurozone economy.
Other important version of the euro is the commercial balance. This indicator measures the difference between what a country gains from its exports and what it spends on imports during a certain period. If a country produces very absolute after exports, its currency will obtain a purely value of the additional demand created from foreign buyers who seek to buy these goods. Therefore, the positive and positive trade balance enhances the currency and vice versa to achieve a negative balance.