Vasilis Tsaprounis
Independent Analyst
The single European currency is trading near 1,0850 levels in the early trading hours of the new week as the US Memorial Day holiday and a very poor agenda in the Eurozone limit the chances for some sharp volatility.
The previous week provided minimal excitement as throughout the 5 days the range of variation was limited to only around of 70 points and the pair remained trapped between the 1,08 -1,09 levels.
Αs in general the market picture remains unchanged investors avoid taking big bets consequently the exchange rate is struggling to take any specific direction at present.
The bets on the prospects for a rate cut by the Fed and ECB remain the same with the ECB moving forward with the first-rate cut most likely in June while correspondingly, although the chances were slightly narrowed last week, they remain quite high that Fed will proceed with the first cut in the interest rate in September.
The single European currency continues to defend the 1,08 level even though the clearly US dollar higher interest rates could gives room for the dollar to move higher.
On today's very poor agenda the only standout is IFO institute's announcement on the climate and expectations for the German economy with a possible significant deviation from expectations could increase volatility on exchange rate.
With the scenario of a quiet trading day gathering the best chances I prefer to stay on hold.
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