- EUR/USD continues to grapple with 1.0800.
- Euro area GDP figures due in the midweek, after Tuesday’s US CPI inflation.
- An appearance from ECB President Lagarde due later in the week.
EUR/USD tested 1.0800 on Monday, but broad-market flows remain tepid in thin action to kick off the new trading week. A light data calendar on Monday will give way to a fresh print of US Consumer Price Index (CPI) inflation figures on Tuesday, and investors will be keeping a close eye on price growth figures from the US.
The euro area sees Gross Domestic Product (GDP) figures on Wednesday, to be followed by an appearance from European Central Bank (ECB) President Christine Lagarde on Thursday. The US’ Tuesday CPI inflation gives way to US Retail Sales on Thursday.
Daily digest market movers: EUR/USD capped by descending 200-day SMA as markets await data
- Quiet Monday leaves EUR/USD constrained in a familiar midrange.
- Bullish momentum remains capped by median technical barriers.
- Higher lows continue to push higher despite constrained momentum.
- Tuesday’s US YoY Core CPI inflation is expected to tick down to 3.7% from 3.9%.
- January’s MoM CPI headline inflation forecast to hold steady at 0.2% after the Bureau of Labor Statistics introduced changed seasonal adjustment methods, December’s figure gets revised down from 0.3%.
- Euro area GDP growth is broadly forecast to hold steady at 0.11% for the year ended in the fourth quarter.
- US Retail Sales expected to ease -0.1% in January compared to December’s 0.6% gain.
Euro price today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the New Zealand Dollar.
USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
USD | 0.22% | 0.06% | -0.05% | -0.09% | 0.12% | 0.26% | 0.17% | |
EUR | -0.22% | -0.16% | -0.27% | -0.29% | -0.10% | 0.04% | -0.05% | |
GBP | -0.06% | 0.16% | -0.10% | -0.14% | 0.06% | 0.20% | 0.11% | |
CAD | 0.05% | 0.27% | 0.10% | -0.04% | 0.16% | 0.31% | 0.22% | |
AUD | 0.08% | 0.30% | 0.14% | 0.04% | 0.20% | 0.35% | 0.25% | |
JPY | -0.12% | 0.08% | -0.04% | -0.15% | -0.20% | 0.13% | 0.05% | |
NZD | -0.27% | -0.04% | -0.20% | -0.31% | -0.35% | -0.14% | -0.09% | |
CHF | -0.17% | 0.05% | -0.11% | -0.22% | -0.25% | -0.05% | 0.09% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Technical analysis: EUR/USD drives in circles on Monday as 1.0800 proves too slippery
EUR/USD climbed into 1.0800 for the first time since falling back below the key handle in early February. The pair has been steadily grinding higher from February’s early lows near 1.0720, buit steady momentum into the upside sees plenty of technical resistance.
The pair remains capped by the 200-hour Simple Moving Average (SMA), and Monday’s test above 1.0800 saw the EUR/USD quickly rejected back into the 1.0770 region.
Despite four straight days of gains for the EUR/USD, the pair remains on the bearish side of the 200-day SMA near 1.0830. The EUR/USD remains down over 3% from December’s peak bids near 1.1150, and a bearish trend sees little topside potential for the pair as the 50-day SMA turns bearish and is set for a downside crossover of the 200-day SMA.
EUR/USD hourly chart
EUR/USD daily chart
US Interest rates FAQs
Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%.
If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation.
Higher interest rates generally help strengthen a country’s currency as they make it a more attractive place for global investors to park their money.
Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank.
If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold.
The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure.
Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.
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