- The euro cuts the profits of the previous days while the US dollar jumps due to risk aversion.
- Israel’s attack to Iran has compensated for the impact of soft US inflation data.
- The correction of the EUR/USD remains contained above the previous maximums.
The Eur/USD It interrupts a four -day rally on Friday, going back from almost four years above 1,1600 to the lower range of 1,1500. Israel’s attack to Iran caused a reversal risk reaction, with investors hurrying safe assets such as the US dollar (USD).
The tensions in the Middle East are climbing after Israel attacked the nuclear plants of Iran and kill several senior military officers of the Revolutionary Guard. Iran responded with a drone attack and retired from nuclear negotiations with the US, increasing the concerns of a large -scale war on the area and putting investors on alert.
The Averso to Risk Scenario has provided significant support to the US dollar, which, until now, was depressed in minimums of several years after the US inflation figures increased hopes that the Federal Reserve (Fed) will cut the rates of interest in September.
The US Producer Price Index (IPP) Producer Index published on Thursday revealed more slow price pressures than expected at the factory door in May. These figures follow another moderate increase in Consumer Price Index (CPI) seen earlier this week, and have relieved fears on the inflationary impact of tariffs, at least for now.
In the Eurozone, the final figures of the German CPI published on Friday revealed that inflation remained close to levels close to the objective of 2% of the ECB. French inflation was confirmed in a moderate 0.6%, while price growth in Spain was reviewed slightly 2%.
Later today, industrial production of the Eurozone will be published, although the impact of the data will probably be moderate with geopolitical tensions promoting markets.
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 New Zealand dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.25% | 0.29% | 0.16% | 0.12% | 0.71% | 0.85% | 0.06% | |
| EUR | -0.25% | 0.08% | -0.02% | -0.07% | 0.55% | 0.57% | -0.20% | |
| GBP | -0.29% | -0.08% | -0.18% | -0.23% | 0.39% | 0.48% | -0.26% | |
| JPY | -0.16% | 0.02% | 0.18% | -0.02% | 0.55% | 0.67% | -0.11% | |
| CAD | -0.12% | 0.07% | 0.23% | 0.02% | 0.57% | 0.74% | -0.03% | |
| Aud | -0.71% | -0.55% | -0.39% | -0.55% | -0.57% | 0.11% | -0.66% | |
| NZD | -0.85% | -0.57% | -0.48% | -0.67% | -0.74% | -0.11% | -0.75% | |
| CHF | -0.06% | 0.20% | 0.26% | 0.11% | 0.03% | 0.66% | 0.75% |
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: geopolitical tensions give some life to the US dollar
- Israel’s bombardment over Tehran has given a new boost to the US dollar, sending the euro 0.7% below the maximum of several years reached Thursday. However, the common currency is still on the way to a weekly recovery of 1.3%. The dollar had fallen during the week, affected by the lack of details on the commercial agreement between the US and China and the soft inflation data.
- Thursday’s data revealed that the US IPP grew at a monthly rate of 0.1% in May, below the market consensus of an advance of 0.2%, and a 2.6% year -on -year, as expected. The underlying IPP registered another 0.1% monthly increase, well below the expected 0.3%, and 3% year -on -year. The market consensus anticipated a 3.1% reading from 3.2% in April.
- Consumer prices in the US modeled their increase to 0.1% compared to the previous month and 2.4% compared to the same month last year, below the 0.2% and 2.5% increase market consensus, respectively.
- With the Federal Reserve in a period of silence before the meeting next week, these figures have raised the hopes of a rate cut in September. The CME Group Fed Watch tool shows a 60% probability of a 25 basic points cut after summer, compared to almost 50% last week.
- In Europe, the officials of the European Central Bank continue to support the hard line position of the BCE president, Christine Lagarde, highlighting a monetary divergence with the US Central Bank that has been supporting the euro.
- On Thursday, the ECB member, Isabel Schnabel, observed that the eurozone growth prospects are “widely stable” with inflation stabilizing in the 2%target, before stating that the opinion that the bank’s monetary cycle is coming to an end.
- The final figures of the German CPI justified those arguments on Friday. Consumer inflation grew at a rate of 0.1% in May and 2.1% year -on -year, in line with expectations and at the same rate seen in April.
Technical Analysis: EUR/USD in Bassist Correction with Support in 1,1500
EUR/USD It has been rejected in the 1,1600 zone and is correcting down. However, the broader trend remains positive, with the torque registering maximum and minimum higher, and with the 4 -hour RSI still at levels above 50, which reflects a slight bullish impulse.
It is likely that the torque finds support between the maximum of June 5, in 1,1495, and the psychological level of 1,1500 if the dust of the Israel-Iran conflict is based. Below here, the following support is 1,1460, which is widely aligned with the maximum of June 2 and 10. A greater decrease beyond this level would question the upward trend.
Upwards, the resistances are found in 1,1612 (maximum intradic) and then probably in 1,1685, the 361.8% Fibonacci extension of the negotiation range of the beginning of June.
Euro Faqs
The euro is the currency of the 19 countries of the European Union that belong to the Eurozone. It is the second most negotiated currency in the world, behind the US dollar. In 2022, it represented 31 % of all foreign exchange transactions, with an average daily business volume of more than 2.2 billion dollars a day. The EUR/USD is the most negotiated currency pair in the world, with an estimate of 30 %of all transactions, followed by the EUR/JPY (4 %), the EUR/GBP (3 %) and the EUR/AU (2 %).
The European Central Bank (ECB), based in Frankfurt (Germany), is the Eurozone reserve bank. The ECB establishes interest rates and manages monetary policy. The main mandate of the ECB is to maintain price stability, which means controlling inflation or stimulating growth. Its main tool is the rise or decrease in interest rates. Relatively high interest rates (or the expectation of higher types) usually benefit the euro and vice versa. The GOVERNMENT BOOK of the ECB makes decisions about monetary policy in meetings that are held eight times a year. The decisions are made by the directors of the National Banks of the Eurozone and six permanent members, including the president of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the harmonized consumer prices index (IPCA), are an important economic indicator for the euro. If inflation increases more than expected, especially if it exceeds 2% of the ECB, it forces the ECB to rise interest rates to control it again. Relatively high interest rates compared to their counterparts usually benefit the euro, since they make the region more attractive as a place for global investors to deposit their money.
Published data measure the health of the economy and can have an impact on the euro. Indicators such as GDP, manufacturing and services PMIs, employment and consumer trust surveys can influence the direction of the single currency. A strong economy is good for the euro. Not only attracts more foreign investment, but it can encourage the ECB to raise interest rates, which will directly strengthen the euro. Otherwise, if economic data is weak, the euro is likely to fall. The economic data of the four largest economies in the euro zone (Germany, France, Italy and Spain) are especially significant, since they represent 75% of the economy of the euro area.
Another important fact that is published on the euro is the commercial balance. This indicator measures the difference between what a country earns with its exports and what you spend on imports during a given period. If a country produces highly demanded export products, its currency will gain value simply by the additional demand created by foreign buyers seeking to buy those goods. Therefore, a positive net trade balance strengthens a currency and vice versa in the case of a negative balance
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.
