EUR/USD: Tight trading range remains on play with small gains for US Dollar
|The single European currency remains near the 1,0750 level under mild pressure for a third straight day as last Friday's disappointing US jobs data begins to fade.
The prospect of rates cuts by both main central banks has returned to the fore and the latest comments from Fed officials have brought back to the fore the possibility that the Fed's first rate cut will be delayed.
The difference in key interest rates between Fed and ECB continues to be the main catalyst that will affect the exchange rate. Even though the European currency is showing very good signs of resistance and good reactions the prospect of an easy return to levels above 1,10 in the near future gathers limited chances.
The high possibility of a first interest rate cut by the ΕCB in June remains on the table, which will further widen the spread between the euro and the dollar.
Several macroeconomic data that have been announced for the European economy recently show signs of optimism, but we are still far from seeing the European economy develop high growth rates.
In such an environment investors remain cautious and avoid taking large bets by following very closely the announcements and comments of central banks officials.
Today's agenda, apart from some comments from Fed officials, does not include anything else important, and the scenario of the pair remaining in a narrow range of variation its the most likely.
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