EUR dips amid improving US-China trade relations
|The euro dipped slightly following last night’s news on the easing in US-China trade tensions, but it remains well supported on the dollar above the 1.14 level.
In what has been a very common trend in the past couple of months, the euro has been largely driven by developments in the US so far this week.
There will be no major economic data released in the Euro Area in the coming days, so all attention will be on a handful of speeches from European Central Bank officials, including members Lane, Knot, Panetta, De Guindos, Schnabel and Elderson. Thus far, communications from these officials have, on the whole, been somewhat hawkish.
Holzmann noted on Monday that he was optimistic on the tariffs, and that the pause in cutting rates could last a while, while Vucic said that the ECB should wait until at least September before deciding on the next move in rates.
News this morning that the ECB’s wage tracking points to earnings growth of 3.1% in 2025 (just above the 3% that the bank believes is consistent with achieving the 2% inflation target) may encourage the Governing Council to hold off on additional cuts for at least a few more months.
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