EUR/USD reaches weekly lows after strong US PPI data, trades near 1.0870

EUR/USD hit a weekly low at 1.0872 amid a stronger Greenback.
US Core PPI held steady with a 2.0% YoY and rose by 0.3% in February.
US Dollar appreciates despite the correction in US Treasury yields.

Akhtar Faruqui FXStreet

The EUR/USD pair continues its downward trend for the second consecutive day, hitting weekly lows near 1.0870 in the Asian session on Friday. The depreciation of the EUR/USD is attributed to the US Dollar (USD) gaining strength, buoyed by the robust Producer Price Index (PPI) data from the United States (US), signaling ongoing inflationary pressures in the economy.

The US Core Producer Price Index (PPI) held steady with a 2.0% year-over-year increase in February, surpassing expectations which were set at 1.9%. Monthly, the report indicated a 0.3% uptick compared to the previous 0.5%, outperforming the anticipated 0.2% reading.

In February, the US PPI (YoY) experienced a 1.6% increase, exceeding both the expected 1.1% and the previous 1.0%. Meanwhile, the PPI (MoM) saw a 0.6% rise, surpassing market expectations and the previous 0.3% increase.

These figures add complexity to the Federal Reserve's interest rate cut timeline. According to the CME FedWatch Tool, the probability of a rate cut in March currently sits at 1.0%, decreasing to 7.7% for May. The likelihood of rate cuts in June and July are comparatively lower, standing at 59.0% and 79.4%, respectively.

The Euro confronts further hurdles due to the dovish stance emerging from European Central Bank (ECB) policymakers. François Villeroy de Galhau, an ECB policymaker, suggested on Wednesday that a rate cut in the spring remains probable. Additionally, on Thursday, ECB Governing Council member Yannis Stournaras advocated for an early rate reduction.

On Friday, ECB Board Member Philip Richard Lane is scheduled to deliver a guest lecture at the Imperial College Business School in London, United Kingdom. Investors are expected to closely monitor his remarks for insights into the ECB's policy direction.

EUR/USD

Overview
Today last price	1.0874
Today Daily Change	-0.0009
Today Daily Change %	-0.08
Today daily open	1.0883

Trends
Daily SMA20	1.0859
Daily SMA50	1.0853
Daily SMA100	1.0855
Daily SMA200	1.0838

Levels
Previous Daily High	1.0956
Previous Daily Low	1.0881
Previous Weekly High	1.0981
Previous Weekly Low	1.0838
Previous Monthly High	1.0898
Previous Monthly Low	1.0695
Daily Fibonacci 38.2%	1.0909
Daily Fibonacci 61.8%	1.0927
Daily Pivot Point S1	1.0857
Daily Pivot Point S2	1.0832
Daily Pivot Point S3	1.0783
Daily Pivot Point R1	1.0932
Daily Pivot Point R2	1.0981
Daily Pivot Point R3	1.1007

Author

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

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