- The euro/the US dollar fell slightly on Wednesday, slid to less than 1.0900.
- European Union data remains non -functional as American data weighs.
- CPI in the United States reduced more than expected in February, as it built hopes in the producers’ price index numbers.
Offers in the euro/US dollar reduced the gas pedal on Wednesday, allowing fibers to retract one third of one percent and pay bids to the main price handle 1.0900. Despite the large recovery in the euro/the US dollar in the past two weeks, buyers have settled after the fiber reset by more than 5 % in less than two weeks.
European economic data is barely recorded in the needle this week with fears related to trade war and inflation data in the United States. On Wednesday, the United States carried out a 25 % global tariff for all steel and aluminum imports, which represents a major escalation in President Donald Trump’s goal to start a trade war simultaneously with all the country’s allies.
In February, the US consumer price index (CPI) enlarged more severely than expected, as the main consumer price index rate is 0.2 % per month and 2.8 % on an annual basis, and slightly faster than predictions. While this remains higher than the Federal Reserve (Fed) by 2 %, it has sparked the hopes of price amendments. The CME Fedwatch now indicates better than the risk of reducing the Federal Reserve in June, from July.
Almost four years have passed since inflation in the United States hit “transitional” levels. Regardless of the slow slowdown in the third quarter of 2024, the main inflation measures have been fixed since June 2023, when the inflation rate after birth decreased to 3 % annually.
Despite the cooler CPI readings in February, there are signs of possible challenges for policy makers: gasoline prices and fuel oil decreased by 3.1 % and 5.1 %, but natural gas prices rose by 6 %. In addition, shelter hypertrophy increased by 4.2 % on an annual basis, while vehicle prices decreased by 0.3 % small by 2.6 % in food rates compared to last year.
Euro/dollar price expectations
EUR/USD appears to be scheduled to finish its last operation, as it closed less and retreated to less than 1.0900 at the same speed that the main handle jumped in the first place. However, the fiber increased approximately 7.6 % from the bottom to the top of the last major oscillation near 1.0175, with the bulls easily captured the 200 -day SIA moving average (EMA) in this process.
EUR/USD now runs technical resistance from a handle of 1.0900, a technical area that finished the euro last time in October and November last year.
The euro graph/daily dollar
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.
