- The euro earns almost 0.50% on Friday, raising the EUR/USD above 1,1650.
- The US dollar index slides towards 98.00, giving most of the profits of the week.
- The feeling of the consumer of the University of Michigan exceeds expectations but fails to boost the US dollar.
The euro (EUR) gains positive traction against the US dollar (USD) on Friday, supported by a weakest dollar amid the relaxation of US treasure yields and a feeling of cautious market. The USD is under slight pressure after a brief rebound during the week, while the operators react to the growing divergence between the Federal Reserve officials (Fed) on the moment and the rhythm of the cuts of interest rates.
The EUR/USD is going up during the American negotiation hours of Friday, with the par quoting around 1,1653. At the time of writing, it rises more than 0.50% in the day.
Meanwhile, the American dollar index (DXY), which tracks the value of the dollar against a basket of six main currencies, remains under pressure about 98.18, having retreated most of its weekly profits. Despite a solid feeling of Michigan’s consumer feeling, the DXY maintains losses, since the data lacked the impulse necessary to relive the bullish impulse.
The preliminary feeling of the consumer of the University of Michigan for July rose to 61.8 from 60.7 in June, exceeding 61.5 expectations. Both the current conditions and the expectations component improved, reflecting a cautious optimism among American homes. The data added signals of economic resilience, reinforcing the opinion that the Fed can be allowed to delay the cuts of interest rates.
The growing divergence among Fed officials continues to cloud the perspectives of interest rates. While Governor Christopher Waller advocated a 25 -PBs cut in July, citing weak labor growth and minimizing inflation driven by tariff as transitory, the president of the Fed of New York, John Williams, warned that the effects of tariff Adriana Kugler, adopted a more balanced tone, supporting the idea of maintaining stable interest rates for “some time” to ensure that inflation remains on a sustained path towards the objective of 2%.
The euro was under pressure at the beginning of the week after the US president, Donald Trump, revealed plans to impose a 30% tariff on imports from the European Union (EU), which will enter into force on August 1, reviving fears of a new transatlantic commercial conflict. The threat of tariffs weighed on the feeling of the market, generating concerns about retaliation measures by the EU and its possible impact on global commercial flows. Adding low pressure, a series of US positive economic data boosted the US dollar, dragging the EUR/USD at its lowest level in almost a month.
Looking ahead, the European Central Bank (ECB) is scheduled to announce its policy decision on Wednesday, July 24. The markets expect that the Central Bank maintains the rates without changes after a cut of 25 pbs in June, while the officials evaluate the incoming data and the global risks. The threat of US tariffs adds a layer of uncertainty, but it is unlikely to alter the short -term policy position.
ECB – FREQUENT QUESTIONS
The European Central Bank (ECB), based in Frankfurt (Germany), is the euro zone reserve bank. The ECB sets interest rates and manages the monetary policy of the region.
The main mandate of the ECB is to maintain prices stability, which means maintaining inflation around 2%. Its main tool to achieve this is to raise or lower interest rates. Relatively high interest rates often translate into a stronger euro, and vice versa.
The BCE Governing Council adopts monetary policy decisions in meetings that are held eight times a year. The decisions are adopted by the directors of the national banks of the euro zone and six permanent members, including the president of the ECB, Christine Lagarde.
In extreme situations, the European Central Bank can launch a political tool called Quantitative Easing (quantitative relaxation). The QE is the process by which the ECB prints euros and uses them to buy assets (normally state or business bonds) to banks and other financial institutions. The result is usually a weaker euro ..
The QE is a last resort when it is unlikely that a simple decrease in interest rates achieves the price stability objective. The ECB used it during the great financial crisis of 2009-11, in 2015 when inflation remained stubbornly low, as well as during the Coronavirus pandemic.
The quantitative hardening (QT) is the reverse of the QE. It is carried out after the QE, when economic recovery is underway and inflation begins to increase. While in the QE the European Central Bank (ECB) buys state and business bonds from financial institutions to provide liquidity, in the QT the ECB stops buying more bonds and stops reinvesting the main one that overcomes the bonds it already has. It is usually positive (or bullish) for the euro.
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.