EUR/USD holds above 1.0800 on a weaker US Dollar, eyes on US data, Fed's Bostic speech

The EUR/USD pair kicks off the new week on a positive note above the 1.0800 mark amid the softer US Dollar (USD). The highlights for this week will be the release of German February Retail Sales and US Gross Domestic Product (GDP) growth numbers for the fourth quarter (Q4). At the press time, EUR/USD is trading at 1.0816, adding 0.08% on the day.  

The Federal Open Market Committee (FOMC) held rates steady at 5.25–5.50% for a fifth consecutive meeting last week. The FOMC’s Chair Powell said the recent elevated CPI inflation data hadn’t changed the view that inflation is trending lower while adding that the central bank would be prepared to cut rates if labour market conditions deteriorated unexpectedly. The FOMC maintained its outlook for median dot for 2024 at 4.625% and signaled three quarter-point rate cuts this year. Any dovish comments from Fed officials weigh on the US Dollar (USD) and cap the downside of the EUR/USD pair. 

Across the pond, European Central Bank (ECB) Governing Council member Edward Scicluna stated that the interest-rate cut from the ECB as soon as April could be warranted and shouldn’t be ruled out. Meanwhile, Bundesbank President Joachim Nagel said on Friday that the ECB may be in a position to cut interest rates before the summer, possibly in June, as inflation is on the way back to the 2% target.

Financial markets anticipate 89 basis points (bps) of rate cuts or at least three but possibly four 25 bps moves, with the first coming in June or July. Additionally, the growing speculation that the ECB will be the second major central bank to cut rates after the Swiss National Bank (SNB) cut rates in a surprise move last week weighs on the Euro (EUR) against the Greenback

Moving on, the Chicago Fed National Activity Index and US New Home Sales for February will be due on Monday, along with the Fed's Bostic speech. On Thursday, the German Retail Sales and US GDP Annualized growth numbers for Q4 will be released. The US economy is forecast to expand 3.4%.