The EUR/USD pair continues to decline for the fourth consecutive day, driven by a strengthening US Dollar (USD), influenced by hawkish market sentiment related to the Federal Reserve (Fed) and expectations of a prolonged interest rate hike. This shift in sentiment is supported by recent strong economic data from the United States (USD). EUR/USD is down to 1.0775 during Asian trading on Friday.
Comments from Fed chief Christopher Waller on Wednesday hinted at a possible postponement of interest rate cuts given the strong inflation data. Investors now await Friday’s release of the U.S. personal consumption expenditures (PCE) report, which serves as the Fed’s preferred inflation gauge, for further insights and guidance.
U.S. gross domestic product (GDP) grew at an annualized rate of 3.4% in the fourth quarter of 2023, beating market expectations that expected growth to remain unchanged at 3.2%. The U.S. Gross Domestic Product Price Index was unchanged at 1.7%, matching expectations for Q4.
The Euro struggled after remarks from European Central Bank (ECB) Governor Francois Villeroy. Villeroy noted the rapid decline in core inflation, although it remains high. He suggested that the ECB’s 2% inflation target is achievable, but warned of increased downside risks if the ECB refrains from cutting rates.
Trading recommendation: Trade mainly with Sell orders from the current price level.
Origin: FreshForex
