- EUR/USD received support after the lower CPI and Retail Sales data released on Wednesday.
- US Dollar depreciated due to lower US Treasury yields.
- The Euro appreciates on increasing expectations for a convergence in monetary policy between the Eurozone and the US.
EUR/USD treads water to continue its winning streak for the fourth session, trading around 1.0880 during the Asian hours on Thursday. The US Dollar’s (USD) decline is contributing to pressure on the EUR/USD pair, which could be attributed to the improved risk appetite.
On Wednesday, the lower-than-expected monthly Consumer Price Index (CPI) and Retail Sales data in the United States (US) supported the probability of multiple rate cuts by the Federal Reserve (Fed) in 2024. US CPI decelerated to 0.3% month-over-month in April and came in at a lower-than-expected 0.4% reading. While Retail Sales flattened, falling short of the expected increase of 0.4%.
The US Dollar Index (DXY), which gauges the performance of the US Dollar (USD) against six major currencies, hovers around 104.20. The decline in the US Treasury yields is weakening the Greenback. The 2-year and 10-year yields on US Treasury bonds stand at 4.71% and 4.32, respectively, by the press time.
On the Euro side, on Wednesday, the seasonally adjusted Gross Domestic Product (GDP) for the Eurozone expanded by 0.3% quarter-on-quarter in the first quarter, meeting expectations. This growth signals a recovery from the 0.1% contraction experienced in each of the previous two quarters. Additionally, the annual growth rate matched expectations at 0.4%.
The Euro receives support from increasing expectations for a convergence in monetary policy between the Eurozone and the United States (US). The European Central Bank (ECB) is anticipated to lower rates during its upcoming meeting in June. While, market expectations are rising for the Fed to commence interest rate cuts from September, particularly after core inflation slowed in April for the first time in six months.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD remains depressed below 0.6300 as trade jitters underpin USD
AUD/USD trades with a negative bias below the 0.6300 mark amid a mildly stronger USD, which hit a three-week top during the Asian session. Moreover, worries over Trump's trade tariffs weigh on investors' sentiment and further undermine the risk-sensitive Aussie amid bets that the RBA will cut interest rates again in May.
USD/JPY flat-lined around mid-150.00s; remains close to multi-week high set on Tuesday
USD/JPY struggles to build on the overnight move higher and oscillates around mid-150.00s during the Asian session on Thursday amid mixed cues. Hawkish BoJ expectations and the risk-off impulse, led by Trump's new tariff on imported cars, underpin the safe-haven JPY, capping spot prices.
Gold price sticks to positive bias above $3,000 on safe-haven demand
Gold price ticks higher during the Asian session on Thursday as worries about Trump's tariff plans continue to benefit the safe-haven bullion. However, a modest USD uptick to a three-week high caps the commodity. Traders also seem reluctant and opt to wait for the release of the US PCE Price Index on Friday.
Stablecoin mania kicks off as Wyoming and Fidelity join the race
According to Governor Mark Gordon, the state of Wyoming has joined the race for a stablecoin, following plans to launch WYST, a US Dollar-backed token in July.
Sticky UK services inflation shows signs of tax hike impact
There are tentative signs that the forthcoming rise in employer National Insurance is having an impact on service sector inflation, which came in a tad higher than expected in February. It should still fall back in the second quarter, though, keeping the Bank of England on track for three further rate cuts this year.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.