- The euro falls below 1,1400 after weak data from the Eurozone IPC.
- The US dollar can be seen even more for strong employment figures in the US.
- The US services PMI and the use of ADP are in the focus on Wednesday.
The EUR/USD moves down for the second consecutive day on Wednesday, quoting around 1,1380 at the time of writing. A positive surprise in the US employment offers on Tuesday has improved the mood of investors, contributing to relieve concerns about the economic impact of tariffs.
The euro, on the other hand, was beaten by the publication of data from the consumer price index (CPI) of the softest eurozone than expected, which clears the road so that the European Central Bank (ECB) continues to reduce interest rates in the coming months.
In the economic calendar on Wednesday, the services of services of Spain, France and Germany precede the final reading of the PMI of HCob services of the Eurozone.
Apart from that, the ECB starts a two -day monetary policy meeting, which is very likely to conclude with an interest rate cut of 25 basic points (PB) that will be announced on Thursday. The main interest of the event will be the subsequent press conference of the president of the ECB, Christine Lagarde, to evaluate the possibilities of a pause in July.
In the US, a strong publication of Jolts employment offers improved the feeling of the market and compensated for the disappointing figures for factory orders. The mood of investors is still positive on Wednesday, which supports the US dollar.
Later in the American session, the US ISM Services PMI figures and the change of employment of ADP will provide a guide for the US dollar, on a day when the US commercial partners are expected to present their “best offers” to reach trade agreements that, until now, remain elusive.
Euro price today
The lower table shows the percentage of euro change (EUR) compared to the main currencies today. Euro was the strongest currency against the US dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.20% | -0.16% | -0.04% | -0.04% | -0.13% | -0.20% | -0.13% | |
| EUR | 0.20% | 0.01% | 0.13% | 0.14% | 0.07% | -0.02% | 0.06% | |
| GBP | 0.16% | -0.01% | 0.08% | 0.12% | 0.06% | -0.03% | 0.04% | |
| JPY | 0.04% | -0.13% | -0.08% | 0.03% | -0.13% | -0.09% | -0.05% | |
| CAD | 0.04% | -0.14% | -0.12% | -0.03% | -0.09% | -0.16% | -0.09% | |
| Aud | 0.13% | -0.07% | -0.06% | 0.13% | 0.09% | -0.09% | -0.02% | |
| NZD | 0.20% | 0.02% | 0.03% | 0.09% | 0.16% | 0.09% | 0.07% | |
| CHF | 0.13% | -0.06% | -0.04% | 0.05% | 0.09% | 0.02% | -0.07% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the euro of the left column and move along the horizontal line to the US dollar, the percentage change shown in the box will represent the EUR (base)/USD (quotation).
What moves the market today: soft inflation data weigh on the euro
- The euro fell from six weeks after the Eurozone CPI showed that inflation fell below the 2% objective of the ECB. The monthly inflation stagnated in May, with the general CPI rate by lowering 1.9% year -on -year (interannual), compared to expectations of a 2% reading. The underlying inflation was reduced to 2.3% year -on -year, beyond the 2.5% expected.
- In the US, Jolts employment offers, a relevant employment indicator for the Federal Reserve (FED), increased to 7.39 million in April, compared to expectations of a slight decrease to 7.1 million and from the reading of 7.2 million March.
- The US factory orders resulted in a 3.7% contraction, which decreased beyond the expected 3%, highlighting the negative impact of President Trump’s commercial policy on the manufacturing activity.
- In the Eastern Eastern Calendar, the main approach is the final reading of the HCOB Services PMI of May, which is expected to confirm that the activity of the sector contracted at 48.9 in May, after five consecutive months of growth.
- During the US session, the attention will be transferred to ADP’s employment report, which will establish expectations for the important publication of non -agricultural payroll on Friday. The market anticipates an increase to 115,000 new payrolls in May, after reading of April 62,000.
- Beyond that, it is expected that the US ISM Services PMI shows some acceleration in business activity in May. These figures are expected to feed the appetite of investors for the risk, which, in recent weeks, has favored USD instead of the euro.
Technical Analysis: The EUR/USD corrects down after rejection in 1,1455
The EUR/USD reached six weeks in 1,1450 on Monday, but failed to consolidate at those levels and has returned to the middle part of the 1,1300s.
The immediate trend is still positive, but the technical indicators in 4 -hour graphics are approaching the bearish territory, and the US dollar index is gaining impulse. Correlation studies suggest that additional correction is on their way to the index on Wednesday.
The level of 1,1365 is keeping the bassists for now, with the next support areas in 1,1310 and the minimums of May 20 and 29 in the area of ​​1,1210. On the positive side, the immediate resistance is in 1,1410 and the maximum of Tuesday in 1,1455.
FAQS inflation
Inflation measures the rise in prices of a representative basket of goods and services. General inflation is often expressed as an intermennsual and interannual percentage variation. The underlying inflation excludes more volatile elements, such as food and fuel, which can fluctuate due to geopolitical and seasonal factors. The underlying inflation is the figure on which economists focus and is the objective level of central banks, which have the mandate of maintaining inflation at a manageable level, usually around 2%.
The consumer price index (CPI) measures the variation in the prices of a basket of goods and services over a period of time. It is usually expressed as an intermennsual and interannual variation. The underlying IPC is the objective of the central banks, since it excludes the volatility of food and fuels. When the underlying IPC exceeds 2%, interest rates usually rise, and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually translates into a stronger currency. The opposite occurs when inflation falls.
Although it may seem contrary to intuition, high inflation in a country highlights the value of its currency and vice versa in the case of lower inflation. This is because the Central Bank will normally raise interest rates to combat the greatest inflation, which attracts more world capital tickets of investors looking for a lucrative place to park their money.
Formerly, gold was the asset that investors resorted to high inflation because it preserved their value, and although investors often continue to buy gold due to their refuge properties in times of extreme agitation in the markets, this is not the case most of the time. This is because when inflation is high, central banks upload interest rates to combat it. Higher interest rates are negative for gold because they increase the opportunity cost to keep gold in front of an asset that earns interest or place money in a cash deposit account. On the contrary, lower inflation tends to be positive for gold, since it reduces interest rates, making bright metal a more viable investment alternative.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
