EURUSD:
The euro is gaining support against other currencies thanks to comments from the European Central Bank (ECB). European Central Bank (ECB) board member Isabel Schnabel said on Tuesday that interest rates in the eurozone are at a good level, adding that risks of inflation remain prevalent. Schnabel said growth is likely to exceed potential as domestic demand offsets the decline in exports.
ECB board member Peter Kazimir said on Monday that policy should not be adjusted due to “minor deviations” from the inflation target, while warning of the risks of rising inflation. Kazimir added that interest rates had been brought to a neutral level.
The EUR/USD rose as the US dollar (USD) weakened on growing expectations that the Federal Reserve (Fed) would cut rates by 25 basis points at its September meeting on Wednesday. Markets also see the likelihood of a more significant 50 basis point cut as low, while anticipating continued policy easing through 2026 to counter the risk of recession.
Trade recommendation: BUY 1.1805, SL 1.1770, TP 1.1860
Origin: FreshForex
