The EUR/USD pair has attracted fresh buyers due to a modest downtick in the US Dollar. The expectations of an interest rate cut by the Federal Reserve later this year have kept the US bond yields depressed, thereby weakening the dollar. This scenario has supported the Euro and led to an increase in the EUR/USD pair.
Traders are cautious and prefer to wait on the sidelines ahead of the crucial European Central Bank (ECB) meeting on Thursday. The ECB is anticipated to cut interest rates by 25 basis points, marking the first rate cut since March 2016. The decision will be accompanied by economic projections and comments by ECB President Christine Lagarde. The market will closely monitor these announcements for cues on future rate cuts and to gauge the impact on the Eurozone inflation.
Following the ECB meeting, market attention will shift to the release of the US Nonfarm Payrolls (NFP) report on Friday. The NFP report is a key indicator of the US job market and plays a significant role in shaping expectations about the Fed’s next policy move. Any surprises in the job data could influence the USD’s strength and impact the EUR/USD pair.
The EUR/USD pair is currently influenced by the expectations of central bank meetings and key economic data releases. The market sentiment towards the US Dollar, Eurozone economic conditions, and US job market dynamics will continue to dictate the direction of the currency pair in the coming days. Traders and investors need to stay informed about these factors to make informed decisions in the forex market.
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