Vasilis Tsaprounis
Independent Analyst
The single European currency is one breath away from the level of 1,0450 as it remains under mild pressure in the wake of yesterday's meeting of the European Central Bank where the decision to cut key interest rates by 25 basis points was fully expected.
With no major surprises, the speech by President Christine Lagarde followed, confirming the central bank's inflation targets but also keeping concerns about the course of the European economy high on the agenda.
Without any catalyst on the table the European currency was unable to maintain any reaction behavior for long, now falling well below the 1,05 level.
The return of yields on US government debt to higher prices also supported the US currency, with the 10-year yield once again exceeding the 4.3 level.
Geopolitical risks remain high on the agenda, despite the small hopes that may arise from the presidency of Donald Trump, especially on the Ukrainian front, who has categorically declared his intention to end this war.
Investor interest is slowly shifting to the next Fed meeting. Without any major surprises, the interest rate gap will remain clearly in favor of the US currency and makes it difficult European currency's efforts to develop any upward momentum.
Today's agenda, while not being indifferent, does not include any high-grade news, with the result that interest is focused on the yields of US debt securities and the probability that the 1.04 level will be challenged may be small for today.
There is no changes in my thinking. I remain on hold, expecting a further fall in the European currency well below 1,04 level in order to consider the possibility of buying the euro.
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