- EUR/USD continues to test the near-term ceiling of 1.0780.
- European PMIs are due to be released next Thursday, but until then the data is thin.
- US PPI rose on Friday, pinning the market in the mid-range.
EUR/USD remained in place on Friday after briefly testing lower levels, but a weak market pushed the pair closer to the day’s open as traders braced for the end-of-week bell. The situation continues to be at a standstill.
The euro (EUR) is expected to be weak on economic data until next week’s Purchasing Managers’ Index (PMI) numbers are released, with the US Producer Price Index (PPI) rising instead of falling on Friday. In response, US data provided little guidance for traders. US markets were dimly lit on Monday due to the President’s Day holiday, with traders waiting until Wednesday’s Federal Reserve meeting minutes for any hints of how close (or far) the US central bank is to cutting interest rates. I guess I’ll have to wait.
Daily Digest Market Movement: EUR/USD struggles to emerge from short-term congestion
- The U.S. core annualized PPI for the year ended January rose to 2.0%, exceeding expectations of 1.6% and 1.7% (revised from 1.8%) in the previous period.
- Month-on-month US PPI rose 0.3% in January, accelerating faster than the expected recovery from -0.1% in the previous month to 0.1%.
- Michigan Consumer Confidence Index rose to 79.6 in February, but the expected 80.0 was lower than January’s 79.0.
- The University of Michigan’s five-year consumer inflation expectations survey in February was flat at 2.9%.
- Remaining high inflation expectations and rising producer-level inflation continue to worry investors desperate for Fed rate cuts.
- Next week will see the release of the latest minutes of the Federal Open Market Committee (FOMC), scheduled for release on Wednesday.
- The euro sees only light indicators on the calendar until next Thursday’s Purchasing Managers’ Index (PMI) release.
- The pan-European HCOB composite index is expected to rise slightly to 48.5 in February from 47.9 in January.
- Europe’s HCOB composite PMI has been in contraction territory below 50.0 since July last year.
today’s euro price
The table below shows the percentage change of the Euro (EUR) against the major listed currencies today. In contrast, the euro was the strongest.
| USD | EUR | GBP | CAD | australian dollar | JPY | new zealand dollar | Swiss franc | |
| USD | -0.03% | -0.02% | 0.16% | -0.13% | 0.17% | -0.28% | 0.13% | |
| EUR | 0.03% | 0.00% | 0.19% | -0.10% | 0.20% | -0.25% | 0.16% | |
| GBP | 0.02% | -0.02% | 0.18% | -0.11% | 0.19% | -0.26% | 0.17% | |
| CAD | -0.16% | -0.20% | -0.18% | -0.27% | 0.01% | -0.44% | -0.03% | |
| australian dollar | 0.13% | 0.11% | 0.12% | 0.30% | 0.31% | -0.14% | 0.27% | |
| JPY | -0.16% | -0.19% | -0.18% | -0.01% | -0.32% | -0.43% | -0.03% | |
| new zealand dollar | 0.27% | 0.25% | 0.26% | 0.45% | 0.15% | 0.44% | 0.41% | |
| Swiss franc | -0.14% | -0.16% | -0.15% | 0.03% | -0.26% | 0.04% | -0.41% |
The heat map shows the percentage change between major currencies. The base currency is selected from the left column and the quote currency is selected from the top row. For example, if you select Euro from the left column and move along the horizontal line to Japanese Yen, the percentage change displayed in the box represents EUR (base)/JPY (estimate).
Technical analysis: EUR/USD struggles to build bullish momentum, 1.0800 remains a level to break
EUR/USD is stuck on a move around the 200-hour simple moving average (SMA) around 1.0760 and is struggling to find the upside momentum needed to regain the 1.0800 handle. EUR/USD rose in both directions on Friday, with only a 10th increase on the day at the time of writing.
EUR/USD is on pace to end near the downside of the 200-day SMA at 1.0830 for the 10th straight trading day as it suffers periodic bearish shocks and bidders try hard to prevent further downside. It continues to be . . The pair is still down more than 3% from December’s highest bid price of around 1.1140.
EUR/USD hourly chart
EUR/USD daily chart
Euro Frequently Asked Questions
The euro is the currency of the 20 European Union countries that belong to the euro area. It is the second most traded currency in the world after the US dollar. In 2022, Accounted for It accounts for 31% of all foreign exchange transactions and has an average daily trading volume of over $2.2 trillion.
EUR/USD is the most frequently traded currency pair in the world. accounting An estimated 30% discount on all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB), located in Frankfurt, Germany, is the reserve bank of the euro area. The ECB sets interest rates and controls monetary policy.
The ECB’s main task is to maintain price stability, which means controlling inflation or stimulating growth. The main means is to raise or lower interest rates. Relatively high interest rates, or expectations of rising interest rates, usually benefit the euro, and vice versa.
The ECB Governing Council decides monetary policy at its eight annual meetings. Decisions will be made by the heads of the euro zone national banks and the six permanent members of the ECB, including Christine Lagarde, president of the ECB.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric indicator for the euro. If inflation rises more than expected, especially above the ECB’s 2% target, the ECB will mandate interest rate hikes to rein in inflation.
Relatively high interest rates compared to other countries typically benefit the euro, as it makes the region more attractive to global investors as a place to park their funds.
The data release will gauge the health of the economy and could have an impact on the euro. Indicators such as GDP, manufacturing and services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency.
A strong economy is good for the euro. As well as attracting more foreign investment, that could prompt the ECB to raise interest rates, which could directly lead to a stronger euro. Otherwise, if economic indicators are weak, the euro is likely to weaken.
Economic data for the euro area’s four largest economies (Germany, France, Italy, and Spain) is particularly important, as they account for 75% of the euro area economy.
Another important data regarding the euro is the trade balance. This indicator measures the difference between what a country earns from exports and what it spends on imports over a given period of time.
If a country produces highly sought-after export goods, the value of its currency increases purely due to the additional demand generated from foreign buyers seeking to purchase these goods. Therefore, if the net trade balance is positive, the currency strengthens, and vice versa if it is negative.
Fed Frequently Asked Questions
Monetary policy in the United States is shaped by the Federal Reserve Board (Fed). The Fed has two responsibilities: achieving price stability and promoting full employment. The main tool to achieve these goals is to adjust interest rates.
If prices rise too fast and inflation exceeds the Fed’s 2% target, interest rates will be raised, increasing borrowing costs for the entire economy. This makes the US a more attractive place for international investors to put their money, and the US dollar (USD) appreciates.
If inflation falls below 2% or unemployment is too high, the Fed could lower interest rates to encourage borrowing, which would weigh on the dollar.
The Federal Reserve (Fed) holds eight annual policy meetings where the Federal Open Market Committee (FOMC) assesses economic conditions and decides on monetary policy.
Twelve Fed officials will attend the FOMC meeting. Seven board members, the president of the New York Fed, and four of the remaining 11 regional reserve bank presidents will serve rotating one-year terms. .
In extreme circumstances, the Federal Reserve may resort to a policy called quantitative easing (QE). QE is a process by which the Fed significantly increases the flow of credit in a stalled financial system.
This is a non-standard policy tool used in times of crisis or when inflation is extremely low. This was the Fed’s weapon of choice during the Great Financial Crisis of 2008. This involves the Fed printing more dollars and using them to buy high-quality bonds from financial institutions. QE typically weakens the US dollar.
Quantitative tightening (QT) is the reverse process of quantitative easing, in which the Federal Reserve stops buying bonds from financial institutions and reinvests the principal of maturing bonds to buy new bonds. Never. It is usually positive for the value of the US dollar.
