EUR/USD: Euro remains stable near 1.1700 awaiting central banks decisions

Vasilis Tsaprounis Independent Analyst

The single European currency is held in a very narrow trading range for the fifth consecutive day in anticipation of the crucial Fed meeting tonight and tomorrow's European Central Bank where interest rate levels will be decided.

Before Israel and US attack on Iran, bets were on two Fed rate cuts this year, which is now off the table.

On the contrary, as oil prices remain high and inflationary pressures are something that will remain on the agenda, the chances of an interest rate increase are now calculable, but not during today's meeting, something that, if it happens, will be a surprise.

Similar thoughts exist on the other side of the Atlantic, where the European Central Bank is expected to keep interest rates steady at its meeting tomorrow, but the messages from Presidents Powell and Christine Lagard are very likely to give room for the next bets.

The market's behavior recently confirmed the thoughts expressed in the previous article as the exchange rate has remained within the known fluctuation trading ranges without significant surprises, which if they do not come today or tomorrow, it is most likely that the picture of the pair will not change significantly.

Macroeconomic data remains in the shadow of geopolitical developments, but growth and inflation data are expected to play an important role in the near term as we enter a time horizon where developments on the Middle East front will begin to be reflected in the real economy.

As the environment remains extremely cloudy with data, especially in the geopolitical environment, being extremely fragile, I will prefer to remain in a wait-and-see attitude, maintaining the idea of buying the US currency near the 1.20 level, as I had mentioned in the previous article too.

Author

Vasilis Tsaprounis

Independent Analyst

Vassilis Tsaprounis possesses over 25 years of professional experience in Capital Markets and especially in the foreign exchange market.

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