EUR/USD remains under selling pressure near 1.0650, investors await Eurozone, US PMI

The EUR/USD pair remains under selling pressure and trades in negative territory for the fourth straight day during the early European session on Friday. The major pair currently trades near 1.0653, losing 0.06% on the day.

European Central Bank (ECB) Chief Economist Phillip Lane said on early Friday that inflation above 2% is costly for the economy and that central banks attempt to control inflation over the medium term. On Thursday, German Bundesbank President Joachim Nagel stated that the inflation rate in the eurozone is not approaching 2% at the desired rate and core inflation remains stubbornly high and is expected to fall only gradually.

ECB is expected to end its hiking cycle and will stay on hold until at least July next year, according to economists in a Reuters poll. It's worth recalling that the ECB raised its key interest rate to a record high of 4% on September 14. This, in turn, might drag the Euro lower against the Greenback.

Across the pond, the Fed decided to hold interest rates unchanged at the 5.25-5.50% range on Wednesday’s meeting, as widely anticipated in the market. According to the Fed's most recent quarterly predictions, the benchmark overnight interest rate may be hiked one more time this year to a peak range of 5.50% to 5.75%, and rates could be significantly tighter through 2024 than previously anticipated. This, in turn, boosts the Greenback and acts as a headwind for the EUR/USD pair.

About the data on Thursday, the US weekly Initial Jobless Claims dropped to 201,000, the lowest level since January. Meanwhile, the Philly Fed declined to -13.5 in September from 12.0 in the previous reading, below the market expectation of -0.7. Existing Home Sales fell to 4.04M MoM in August from the previous reading of 4.07M.

Looking ahead, the Purchasing Manager Index (PMI) will be released from both the Eurozone and the US docket for this Friday. The preliminary Eurozone Composite PMI is expected to drop from 46.7 to 46.5 in September, while the preliminary PMI for the US is expected to rise slightly. Traders will take cues from these figures and find trading opportunities around the EUR/USD pair.