- The appetite for the risk is promoting the markets and keeping the euro drop attempts limited.
- A strong drop in oil prices is giving additional support to the common currency.
- The EUR/USD has broken the upper part of a bullish flag formation and points to 1,1630 and 1,1700.
The Eur/USD It fell below 1,1600 in the European session on Tuesday, but remains at levels well above Monday’s minimums despite Israel’s accusations that Iran violated the fire. The pair had jumped around 1.30% since the minimums of the previous day after Trump announced a “high and total fire” in the conflict of the Middle East.
Israel accused Iran of launching missiles in his territory in violation of high fire and threatened a strong response to the Republic Islamic Tehran has denied accusations. The appetite for risk It has faltered a little, oil prices have cut some losses, but the US dollar is still depressed.
Crude prices are falling almost 3% so far on Tuesday, after a mass sale of almost 13% on Monday, with WTI barrel returning to $ 63.00 from more than $ 77.00. The fall in oil prices gives some respite to the eurozone, since Europe is a net importer of crude, and expensive oil would increase inflationary pressures in a weakened economy.
With geopolitical tensions decreasing, the testimony of the president From the Fed, Jerome Powell, before Congress, scheduled for 14:00 GMT, will attract attention. Investors are eager to see if the FED chief maintains their waiting position at the growing voices that ask for a feat cut between the officials of the Central Bank.
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 | -0.17% | -0.62% | -0.78% | -0.11% | -0.79% | -0.93% | -0.11% | |
| EUR | 0.17% | -0.49% | -0.64% | 0.06% | -0.62% | -1.21% | 0.08% | |
| GBP | 0.62% | 0.49% | -0.14% | 0.55% | -0.12% | -0.70% | 0.42% | |
| JPY | 0.78% | 0.64% | 0.14% | 0.69% | -0.04% | -0.18% | 0.56% | |
| CAD | 0.11% | -0.06% | -0.55% | -0.69% | -0.69% | -1.25% | -0.14% | |
| Aud | 0.79% | 0.62% | 0.12% | 0.04% | 0.69% | -0.58% | 0.55% | |
| NZD | 0.93% | 1.21% | 0.70% | 0.18% | 1.25% | 0.58% | 1.13% | |
| CHF | 0.11% | -0.08% | -0.42% | -0.56% | 0.14% | -0.55% | -1.13% |
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: the appetite for the risk makes the US dollar fall
- Markets are going through a relief rebound. The announcement of the Alto El Fuego between Israel and Iran has dissipated the fears of a large -scale war in the region, caused by the participation of the United States during the weekend. The American dollar index, which measures the value of the USD compared to the six most negotiated currencies, has fallen more than 1% since the high fire was announced, giving most of the land earned in the last two weeks.
- Iran launched missiles against Israel, killing four, after an attack on an American military base in Qatar, which did not cause injuries. Iranian Foreign Minister said that Tehran will only stop his attacks when Israel ceases his bombings. However, investors are holding the agreement as an consummate.
- In the macroeconomic front, the IFO business climate index of Germany increased to 88.4 in June from 87.5 in May, slightly above the expected 88.3. Business expectations have also improved, at 90.7 from the previous 88.9, exceeding the expectations of a 90.0 reading. However, the impact on the euro has been minimal.
- In the US, the culminating point is the semiannual monetary policy report of the president of the FED, Powell, before the Congress, scheduled for Tuesday and Wednesday. The head of the Central Bank will be questioned about the bank’s plans to deal with a context of weakened growth and greater inflationary pressures. His comments will be observed with interest after the recent moderate statements of Bowman and Waller.
- Investors have increased bets due to a Fed fees cut in the coming months after the recent statements of the Fed. Future markets are now valuing the possibility of a cut in July, compared to 14% of last week, while the expectations of a cut in September have increased to more than 80% from less than 70% last week, according to the Fed Watch tool of the CME Group.
- The Eurozone data published on Monday showed that business activity remained in general stable in June. The preliminary PMIs of manufacturing and services were approximately at the same levels as in the previous month, in 49.4 and 50.0, respectively. The euro retreated after the publication of the data, since investors expected slightly better results.
- In the US, the preliminary PMIs of Global S&P exceeded expectations. The manufacturing PMI remained stable in 52 in June, in the face of the expectations of a deceleration to 51, while the PMI of services dropped to 53.1 from the previous one 53.7, even better than the reading of 52.9 forecast by the analysts.
EUR/USD break up and focus its attention on the maximum of 1,1630
EUR/USD It has broken above the upper part of the corrective channel of recent weeks, driven by a favorable market feeling with the bulls focusing their attention on the maximum of June 12 in 1,1630.
The rupture of the resistance of the trend line in 1,1540 highlights a bullish flag formation, whose measured objective is located in the 1,1700 zone, where the Fibonacci extension of 127.2% of the rebound from June 10 to 12 is located.
In the lower part, a bearish reaction from these levels could seek support in the line of reverse trend, now around 1,1535, before re -checking again. A confirmation below that level would cancel the upward perspective and bring attention to the minimum of June 19 and 22 in 1,1445.
Fed Faqs
The monetary policy of the United States is directed by the Federal Reserve (FED). The Fed has two mandates: to achieve prices stability and promote full employment. Its main tool to achieve these objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the objective of 2% set by the Federal Reserve, it rises interest rates, increasing the costs of loans throughout the economy. This translates into a strengthening of the US dollar (USD), since it makes the United States a more attractive place for international investors to place their money. When inflation falls below 2% or the unemployment rate is too high, the Federal Reserve can lower interest rates to foster indebtedness, which weighs on the green ticket.
The Federal Reserve (FED) celebrates eight meetings per year, in which the Federal Open Market Committee (FOMC) evaluates the economic situation and makes monetary policy decisions. The FOMC is made up of twelve officials of the Federal Reserve: the seven members of the Council of Governors, the president of the Bank of the Federal Reserve of New York and four of the eleven presidents of the regional banks of the Reserve, who exercise their positions for a year in a rotary form.
In extreme situations, the Federal Reserve can resort to a policy called Quantitative Easing (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non -standard policy measure used during crises or when inflation is extremely low. It was the weapon chosen by the Fed during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy high quality bonds of financial institutions. The one usually weakens the US dollar.
The quantitative hardening (QT) is the inverse process to the QE, for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the bonds that it has in portfolio that they expire, to buy new bonds. It is usually positive for the value of the US dollar.
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.
