- EUR/USD falters around 1.0300 as investors focus their attention on the inauguration ceremony of US President-elect Donald Trump.
- Trump is expected to announce policies on raising tariffs and cutting taxes soon after returning to the White House.
- ECB minutes showed that officials debated reducing the deposit facility rate by 50 bps in December.
EUR/USD trades cautiously in a tight range near the key 1.0300 level in the early stages of the North American session on Friday. The major currency pair oscillates within Thursday’s trading range, with investors focused on the inauguration of United States (US) President-elect Donald Trump on Monday.
Investors are awaiting Trump’s announcement on new economic policies for fresh clues about the United States (US) economic outlook and the likely global trade environment. Market experts believe Trump’s policies will boost inflation and economic growth and lead to a global trade war.
While testifying before the Senate Finance Committee on Wednesday, Trump’s Treasury pick, Scott Bessent, said there is an urgent need to end the current tax regime to avoid the burden of a $4 trillion tax on the class. average. “If we don’t renew and extend, then we will face an economic calamity,” Bessent said. He also supported Trump’s protectionist policies, as they would help combat unfair trade practices and increase US bargaining power.
Meanwhile, the US Dollar Index (DXY), which tracks the value of the Dollar against six major currencies, rises and holds the key support of 109.00. The US dollar remains broadly firm even as traders began to price in at least one interest rate cut by the Federal Reserve (Fed) this year. Traders have raised dovish expectations for the Fed as the underlying Consumer Price Index (CPI) – which excludes volatile food and energy prices – slowed to 3.2% in December, the lowest level in more than four years.
US Dollar PRICE Today
The table below shows the percentage change of the US Dollar (USD) against major currencies today. The US Dollar was the strongest currency against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.02% | 0.26% | 0.34% | 0.09% | 0.11% | 0.15% | 0.04% | |
| EUR | 0.02% | 0.28% | 0.37% | 0.11% | 0.13% | 0.18% | 0.06% | |
| GBP | -0.26% | -0.28% | 0.08% | -0.16% | -0.15% | -0.11% | -0.22% | |
| JPY | -0.34% | -0.37% | -0.08% | -0.23% | -0.23% | -0.18% | -0.30% | |
| CAD | -0.09% | -0.11% | 0.16% | 0.23% | 0.00% | 0.06% | -0.06% | |
| AUD | -0.11% | -0.13% | 0.15% | 0.23% | -0.00% | 0.04% | -0.08% | |
| NZD | -0.15% | -0.18% | 0.11% | 0.18% | -0.06% | -0.04% | -0.11% | |
| CHF | -0.04% | -0.06% | 0.22% | 0.30% | 0.06% | 0.08% | 0.11% |
The heat map shows percentage changes for major currencies. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you choose the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change shown in the box will represent USD (base)/JPY (quote).
What’s moving the market today: EUR/USD stays alert as ECB officials support further interest rate cuts
- EUR/USD remains under pressure as the outlook for the Euro (EUR) remains weak amid firm dovish expectations from the European Central Bank (ECB). Traders are pricing in a 25 basis point (bps) interest rate cut by the ECB at each of the next four monetary policy meetings amid growing concerns about the Eurozone’s economic outlook and continued pressures. prices under control.
- ECB officials are also comfortable with further interest rate cuts. Minutes from the ECB’s December meeting showed on Thursday that policymakers discussed the pace of policy easing this year more than pausing or continuing the cycle of interest rate cuts. The minutes also showed that officials heavily debated announcing a larger-than-usual rate cut of 50 bps to provide insurance against downside risks to growth, which are exacerbated by global and domestic political uncertainties. However, the ECB cut interest rates by 25 bps.
- There was a clear change in communication from “returning inflation to the ECB’s 2% target” to “maintaining inflation sustainably on target”. The ECB minutes also showed that officials were concerned about the growing risks of inflation falling below the central bank’s 2% target.
- Meanwhile, concerns about the EUR/USD pair falling to parity have accelerated as Trump’s return to the White House is on the horizon. Trump is expected to decide to increase import tariffs soon, a scenario that will be unfavorable for the European Union (EU) export sector.
- On Thursday, ECB policymaker and Bank of Greece Governor Yannis Stournaras said policy should continue with a “series of rate cuts” at upcoming meetings. His dovish stance was based on the assumption that new protectionist measures imposed by the US could lead to “below-target Eurozone inflation.”
Technical Analysis: EUR/USD bounces in tight range around 1.0300
EUR/USD remains sideways near 1.0300 on Friday after gaining ground from the more than two-year low of 1.0175 reached on Monday. The major currency pair bounces on the divergence between momentum and price action. The 14-day Relative Strength Index (RSI) formed a higher low near 35.00, while the pair made lower lows.
However, the outlook for the shared currency pair remains bearish as all short-term to long-term exponential moving averages (EMAs) are tilted downwards.
Looking down, Monday’s low of 1.0175 will be the key support zone for the pair. On the contrary, the January 6 high of 1.0437 will be the key barrier for the Euro bulls.
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.
