- The EUR/USD bounces above 1.1000 after a volatile closure in the US on Wednesday.
- The markets prepare for the publication of the US CPI data and more headlines on tariffs.
- The EUR/USD rally remains intact and re-enters the region of 1.1000-1.1500.
The Eur/USD pair advances and recovers at 1,1050 at the time of writing on Thursday. A swinging session on Wednesday saw the EUR/USD oscillated from 1,1095 to 1,0913, since the president of the United States (USA) Donald Trump softened his position on tariffs and reduced the reciprocal tariff rate for all countries at 10% for a 90 -day pause.
The movement occurred after several people, such as Elon Musk, Bill Ackman and some outstanding figures of the Republican Party – the US stock markets were also giving warning signs – advised the US president that the approach to reciprocal tariffs was playing sensitive fibers. The 90 -day pause was applauded by the markets, since US actions shot. This Thursday’s approach will be transferred to the US Consumer Price Index (CPI) for March.
Daily summary of market movements: all eyes on the US CPI.
- At 12:30 GMT, many data will be published:
-
- March US CPI data:
-
- General monthly inflation is expected to be 0.1%, compared to 0.2% in February. The annual general inflation should fall to 2.6% in March, from 2.8%.
- The underlying monthly inflation is expected to rise to 0.3%, from 0.2%. Annual underlying inflation should decrease to 3.0% in March from 3.1% of the previous month.
- The weekly applications of unemployment subsidy in the US will also be published, with the initial applications seen in 223,000, from 219,000. Continuous requests should fall to 1.88 million from 1,903 million last week.
- At 13:30 GMT, the president of the Federal Reserve Bank (FED) of Dallas, Lorie Logan, is scheduled to speak.
- At 14:00 GMT, the governor of the Fed, Michelle Bowman, will give a testimony at the appointment hearing before the US Senate Committee on Banking, Housing and Urban Affairs.
- At 16:00 GMT, the president and CEO of the Bank of the Federal Reserve of Chicago, Austan Goolsbee, will speak at the New York Economic Club.
- At 16:30 GMT, the president of the Fed Bank of Philadelphia, Patrick Harker, will comment on Fintech at the ‘Research Conference on Fintech and Financial Institutions 2025’ at the Bank of the Federal Reserve of Philadelphia, Ten Independence Mall, Philadelphia.
- The shares are on the rise, with the Europeans firmly in green, rising more than 5%. However, US futures are falling, since the joy of Wednesday after the announcement of Trump tariffs seems to be ephemeral for now.
- The CME Fedwatch tool shows that the possibilities of an interest rate cut by the Federal Reserve (FED) in May have decreased to 19.5% compared to 44.6% seen on Tuesday. For June, the lowest indebtedness costs are 75.3%.
- The 10 -year performance of the United States trades around 4.29% and seeks direction after the rebound throughout this week.
Technical Analysis: Volatile Road
The EUR/USD torque faces volatility since Trump advanced with his announcement and implementation of reciprocal tariffs. The 90 -day pause announced on Wednesday was briefly seen as a reason to strengthen the dollar, but now the feeling of the market revolves around the fact that 90 days may not be so much time to negotiate with all countries affected by reciprocal tariffs on all types of products and goods.
The important psychological level of 1.1000 is being recovered, with the EUR/USD approaching the area of 1,1050 at the time of writing. The following objective is the level of 1,1200, which limited the progress of the EUR/USD in August and September 2024, with intermediate resistance in the maximum of the current year of 1,1146.
In the lower part, the ascending trend line, which is around 1,0910, should be sufficient to support the rally. In the event that this line is broken, the 200 -day simple mobile average (SMA) in 1.0735 could limit the fall. Below there, the key level of 1,0667 and the 55 -day SMA in 1,0645 should be able to support the main currency pair.
EUR/USD: weekly graphic
US dollar FAQS
The US dollar (USD) is the official currency of the United States of America, and the “de facto” currency of a significant number of other countries where it is in circulation along with local tickets. According to data from 2022, it is the most negotiated currency in the world, with more than 88% of all global currency change operations, which is equivalent to an average of 6.6 billion dollars in daily transactions. After World War II, the USD took over the pound sterling as a world reserve currency.
The most important individual factor that influences the value of the US dollar is monetary policy, which is determined by the Federal Reserve (FED). The Fed has two mandates: to achieve price stability (control inflation) and promote full employment. Its main tool to achieve these two objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the 2% objective set by the Fed, it rises the types, which favors the price of the dollar. When inflation falls below 2% or the unemployment rate is too high, the Fed can lower interest rates, which weighs on the dollar.
In extreme situations, the Federal Reserve can also print more dollars and promulgate quantitative flexibility (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is an unconventional policy measure that is used when the credit has been exhausted because banks do not lend each other (for fear of the default of the counterparts). It is the last resort when it is unlikely that a simple decrease in interest rates will achieve the necessary result. It was the weapon chosen by the Fed to combat the contraction of the credit that occurred during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy bonds of the US government, mainly of financial institutions. Which usually leads to a weakening of the US dollar.
The quantitative hardening (QT) is the reverse process for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the wallet values that overcome in new purchases. It is usually positive for 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.
