EUR/USD posts modest gains around 1.1070 as traders enter holiday mode
- EUR/USD trades with modest gains near 1.1070 amid light trading volume.
- The hawkish remarks from the European Central Bank (ECB) boost the Euro against the USD.
- The markets anticipate the Federal Reserve (Fed) to cut rates as early as March next year.
The EUR/USD pair posts modest gains after retreating from a monthly high of 1.1139 during the early Asian trading hours on Friday. At the press time, the major pair is trading at 1.1070, up 0.04% for the day.
That being said, the hawkish stance from the European Central Bank (ECB) lends some support to the Euro (EUR) and acts as a tailwind for the EUR/USD pair. The ECB policymakers pushed back against market expectations and highlighted that the central bank’s policy decisions are data-dependent and not influenced by market pricing or time-bound pressures.
Unlike the ECB, the Federal Reserve (Fed) delivered rather dovish remarks, and traders anticipate the US central bank to cut interest rates next year. According to the CME FedWatch Tool, the markets have priced in over 87% odds of a rate cut in the March meeting.
US Initial Jobless Claims for the week ended December 23 showed 218,000 new jobless benefits seekers from the previous week of 206,000, worse than the market forecast of 210,000. US Pending Home Sales in November came in flat at 0% and weaker than 1.0% expected.
The market is likely to be quiet on the last trading day of 2023. Spain’s preliminary readings of the December Consumer Price Index (CPI) and the US Chicago Purchasing Managers’ Index (PMI) for December are due on Friday.
Author
Lallalit Srijandorn
FXStreet
Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.
