The EUR/USD pair is slightly down, hovering around 1.1465 during the early Asian trading hours on Thursday. The US dollar has gained marginally against the euro following the Federal Reserve’s decision to maintain a hawkish stance on interest rates. Traders are now anticipating the preliminary GDP data for the second quarter from Germany and the wider euro zone.
In its July meeting, the Fed opted to keep interest rates unchanged in the 3.5% to 3.75% range. While most market analysts expected this move, some officials, including Dallas Fed President Laurie Logan and Cleveland Fed President Beth Hammack, voiced their opposition to a proposed 25 basis point rate hike.
During a news conference, Federal Reserve Chairman Kevin Warsh stated that while the bank wouldn’t provide guidance on future rate policies, it would take necessary actions to meet the 2% inflation target.
The upcoming GDP figures for the eurozone and Germany will attract a lot of attention later on Thursday. Economists predict a modest GDP growth of 0.2% for the eurozone in the second quarter, recovering from a previous contraction of 0.2%. As for Germany, a slight growth of 0.1% is anticipated in this quarter, a decrease from the earlier 0.3%. If the data exceeds expectations, the euro may see a temporary boost.
Peter Kasimir, a member of the European Central Bank’s policy committee, mentioned on Monday that the bank might need to implement at least one more interest rate hike to control inflation. He also noted that the deepening economic outlook might require more rigorous measures than currently anticipated. Financial markets are predicting at least two more rate increases from the ECB, with one expected by October and another by March, according to reports.
