- EUR/USD edges below 1.1300 while the US dollar reinforces after Fed said it is not in a hurry to cure interest rates.
- US president Trump is set to open a bilateral trade deal, reported in the UK, on Thursday.
- The EU has released countermeasures against US tariffs to offset their costs.
EUR/USD ticks less than 1.1300 at European trading time on Thursday. The main edges of the currency pair are the US dollars (USD) Tradings are slightly higher in signals from Federal Reserve (Fed) with no haste in lower interest Rates. The US Dollar Index (DXY), which measures the value of the greenback against six major currencies, higher than near 100.00.
Fed Chair Jerome Powell said that “uncertainty about economic perspective has increased yet “due to the collapse of tariffs announced by US president Donald Trump, with skewed “Risks to both inflation and unemployment upside down”. Therefore, Powell advised that the right thing for the fed today was to “wait more clarity”.
According to the CME Fedwatch tool, merchants are confident that the Fed also continues to borrow borrowing rates at the June policy meeting, but look around a 66% possibility of interest rates lower than current levels in July.
Meanwhile, investors are awaiting the announcement of the White House's first bilateral trade deal under the leadership of US President Trump. On Wednesday, Trump declared a post on Truth.Social that his team closed a deal with one of his trade allies, which would be public on Thursday. According to a report from the New York Times (NYT), the trade partner is the United Kingdom (UK). This is contrary to what Trump signed last week on the television network of newsnation that India, South Korea, and Japan were the first countries to close trade deals.
However, financial market participants are primarily focused on trade discussions between the US and China, which has been scheduled for Saturday in Switzerland. Treasury secretary Scott Bessent and trade representative Jamieson Greer have confirmed that they will meet their Chinese counterparts, aimed at de-escalate the trade war.
Daily Digest Market Movers: EUR/USD is ticks less, EU unveils countermeasures for US tariffs
- EUR/USD is slightly declining as the US dollar moves higher. Although investors supported the USD against the Euro (EUR), the latter is more than a majority of peers.
- However its upside down is expected to remain limited as The European Central Bank (ECB) It is expected that the financial expansion cycle will continue. Entrepreneurs are increasingly confident that the ECB will reduce interest rates at the June meeting.
- ECB officers showed concerns with Eurozone The economic perspective, while it remains confident that inflation will continue to return to the Central Bank's target of 2% by the end of the year.
- Meanwhile, the European Union (EU) commission launched a public consultation paper containing possible countermeasures in response to United States (US) Tariffs. The paper shows countermeasures up to € 95 billion of US imports if trade talks have failed to deliver a satisfactory result for Bloc, which is relatively short of € 100 billion that Bloomberg reported on Tuesday.
- European Trade Commissioner Maros Sefcovic said Wednesday that the commission would announce the countermeasures to offset the cost recorded by US tariffs on the continent, “tomorrow we will announce the next steps in preparation, both in the area of possible rebalancing steps, and in places that are important for further discussions,” said Sefcovic, reported Reuters. However, he clarified that the continent's most important priority was trade negotiations in the US, but not at any cost.
Technical analysis: EUR/USD wobbles around 20-day EMA
EUR/USD ticks are below 1.1300 on Thursday. The pair continues to hold a 20-day exponential transfer of average (EMA) around 1.1260.
The 14-day relative Index Index (RSI) falls within a range of 40.00-60.00, indicating that the bullish momentum is over today. However, the reverse bias remains still.
Looking, the psychological level of 1.1500 will be the main resistance for the pair. By contrast, the September 25 of 1.1214 will be a major support for the Euro Bulls.
Fed faqs
The US financial policy is shaped by the Federal Reserve (FED). The Fed has two mandates: to achieve price stability and promote full work. Its main tool to achieve these goals is by organizing interest rates. When prices rise rapidly and inflation is above the Fed's 2% target, it increases interest rates, increasing borrowing costs throughout the economy. This results in a stronger US dollar (USD) because it makes the US more attractive for international investors to park their money. When inflation falls below 2% or the unemployment rate is too high, the Fed may lower interest rates to encourage borrowing, with a greenback weight.
The Federal Reserve (FED) holds eight policy meetings a year, in which the Federal Open Market Committee (FOMC) assesses economic conditions and makes financial policy decisions. The FOMC was attended by twelve Fed officials-the seven members of the Board of Managers, the President of the Federal Reserve Bank of New York, and four of the remaining eleven regional reserve bank presidents, which served a one-year term on a spinning basis.
In extreme situations, the Federal Reserve can make a policy named EASING (QE). QE is the process by which the Fed greatly increases the flow of credit to a stuck financial system. This is a policy proposal that is not standard used during crises or when inflation is very low. This was the weapon of fed selection during the great financial crisis in 2008. It involves printing the Fed more dollars and using them to buy high -grade high -grade bonds from financial institutions. QE usually weakens the US dollar.
The quantity of tightening (QT) is the Reverse process of QE, where the Federal Reserve stops buying bonds from financial institutions and does not re -consist of the bonds from its bonds, to buy new bonds. This is usually positive for the US dollar value.
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