- The euro has risen above 1.16 for the first time since November 2021.
- Updated tariff concerns and weak inflation data are impacting the US dollar.
- EUR/USD bulls are eyeing an annual high around 1.1575.
EUR/USD has surpassed 1.1600 for the first time since late 2021. This rise is largely attributed to new tariff threats from US President Donald Trump, coupled with hopes for easing financial regulations and hawkish comments from ECB representatives, which are supporting the euro against a weakening US dollar.
The temporary support for the US dollar following a trade ceasefire with China has quickly faded. Trump reignited market concerns on Thursday by stating he would impose unilateral tariffs on trading partners if a trade agreement wasn’t finalized before the July 9 deadline, as reported by Bloomberg.
Before this, the US dollar had already started to lose ground. Recent Consumer Price Index (CPI) data, released on Wednesday, suggests that the Federal Reserve may consider lowering interest rates in September.
According to the CME Fed Watch Tool, the futures market indicates nearly a 60% chance of a 25 basis point cut, up from 50% earlier in the summer.
Meanwhile, European Central Bank officials have reiterated their hawkish stance, as highlighted by President Christine Lagarde after last week’s meeting, signaling further support for the euro through differing monetary policies.
Today’s Euro Price
The current exchange rates show that the euro (EUR) is performing strongly against the US dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.86% | -0.26% | -0.56% | -0.25% | -0.17% | -0.41% | -0.93% | |
| EUR | 0.86% | 0.60% | 0.30% | 0.61% | 0.67% | 0.46% | -0.04% | |
| GBP | 0.26% | -0.60% | -0.33% | 0.00% | 0.06% | -0.16% | -0.67% | |
| JPY | 0.56% | -0.30% | 0.33% | 0.31% | 0.38% | 0.11% | -0.36% | |
| CAD | 0.25% | -0.61% | -0.00% | -0.31% | 0.08% | -0.17% | -0.67% | |
| AUD | 0.17% | -0.67% | -0.06% | -0.38% | -0.08% | -0.22% | -0.72% | |
| NZD | 0.41% | -0.46% | 0.16% | -0.11% | 0.17% | 0.22% | -0.51% | |
| CHF | 0.93% | 0.04% | 0.67% | 0.36% | 0.67% | 0.72% | 0.51% |
The heatmap illustrates the fluctuation rates among notable currencies, providing insight into how they interact with one another. For instance, looking at the euro against the US dollar shows the current rate of change.
Daily Digest Market Mover: “Cel America” is back at full capacity
- Trump stirred the market early Thursday, declaring he would send letters to trading partners regarding trade contract terms to avert higher tariffs before the July 9 deadline.
- A delicate trade ceasefire between the US and China did little to support the dollar Wednesday. The US dollar index dropped to a new seven-week low, nearing its multi-year low of 97.95 from April, with the euro gaining significantly from the dollar’s weaknesses.
- Earlier Thursday, ECB member Schnabel reassured that the monetary cycle for banks would stabilize once inflation levels off, aiming for a 2% growth target in the eurozone.
- On Wednesday, US consumer prices increased by 0.1% in May, marking a 2.4% rise from the previous year. Core inflation remained stable at 2.8% year-over-year, which is slightly under market expectations of 0.3% and 2.9% respectively.
- A strong demand was observed in the US Treasury bond auction on Wednesday, alleviating concerns about the nation’s fiscal debt and offering some support to the dollar.
- The focus for Thursday is on the US Producer Price Index (PPI), expected to reflect modest inflationary pressures, enhancing hopes for interest rate cuts, with predictions of a 0.2% monthly increase and a 2.6% year-over-year rise compared to April.
Technical Analysis: EUR/USD breaks through the 1.1575 level, targeting 1.1600 next
EUR/USD has shown strong movement after breaking out of its recent trading range, surging above the late April high of 1.1570, and is now testing the 1.1600 level, which corresponds with a Fibonacci expansion of 261.8% within that range.
The 4-hour RSI is indicating overbought conditions, suggesting potential pullbacks. However, in the current scenario, dips may attract buyers. Support levels are at 1.1495 (High from June 5) and at 1.1455.
If it surpasses 1.1600, the next target could be the 3618% Fibonacci extension at 1.1685, but reaching those levels without some adjustments or consolidations seems unlikely.
