- EUR/USD is supported by an improvement in global risk sentiment.
- The Euro could face headwinds as markets anticipate a 25 basis point rate cut by the ECB on Thursday.
- CME FedWatch tool indicates that markets are pricing in around 85 basis points of Fed rate cuts by the year-end.
EUR/USD is trading around 1.1340 during the Asian hours on Wednesday, rebounding after two consecutive sessions of losses. The pair is drawing support from a more positive global risk sentiment, buoyed by US President Donald Trump's decision to exempt key technology products from his newly announced “reciprocal” tariffs.
However, further upside for the Euro (EUR) may be limited as markets widely expect the European Central Bank (ECB) to cut interest rates by 25 basis points on Thursday. This move comes amid escalating recession fears linked to US trade policy. The ECB has already lowered rates twice this year, with the Deposit Facility Rate currently at 2.5%. A cut this week would bring it down to 2.25%.
Investors will be closely watching ECB President Christine Lagarde’s press conference for signals on the central bank’s policy direction for the remainder of the year, as well as the potential economic impact of the US tariff measures on the Eurozone.
Meanwhile, the CME FedWatch tool shows that markets are pricing in approximately 85 basis points of Fed rate cuts by year-end, with expectations that the Fed will hold rates steady in the upcoming meeting. Later in the day, attention will turn to US Retail Sales data for March, which may provide further insight into how tariff uncertainties are affecting consumer spending.
Economic Indicator
Core Harmonized Index of Consumer Prices (YoY)
The Core Harmonized Index of Consumer Prices (HICP) measures changes in the prices of a representative basket of goods and services in the European Monetary Union. The HICP, – released by Eurostat on a monthly basis, is harmonized because the same methodology is used across all member states and their contribution is weighted. The YoY reading compares prices in the reference month to a year earlier. Core HICP excludes volatile components like food, energy, alcohol, and tobacco. The Core HICP is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish.
Read more.Next release: Wed Apr 16, 2025 09:00
Frequency: Monthly
Consensus: 2.4%
Previous: 2.4%
Source: Eurostat
BRANDED CONTENT
If you're looking for the best brokers to trade the EUR/USD pair, explore our selected options. Knowing each broker’s strengths will help you find the ideal fit for your trading strategy.
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 holds above mid-0.6300s amid mixed fundamental cues
AUD/USD consolidates near the weekly low touched on Wednesday amid fading optimism over a quick resolution to the US-China trade dispute. Moreover, easing concerns about the Fed's independence assists the USD to preserve its recovery gains registered over the past two days and acts as a headwind for the currency pair.
USD/JPY snaps a two-day winning streak to over one-week high
USD/JPY eases from over a one-week top set on Wednesday and stalls this week's recovery move from a multi-month, though it lacks follow-through selling. Concerns about the US-China trade standoff and the divergent BoJ-Fed policy expectations continue to underpin the JPY, which weighs on the currency pair.
Gold corrected extreme conditions, struggles around $3,300
Gold extended its decline on Wednesday, slipping below the $3,300 mark per troy ounce in response to reports from the media suggesting the Trump administration is weighing tariff reductions on Chinese goods, a news that revived hopes of easing trade tensions and reduced demand for the yellow metal as a safe-haven asset.
TRUMP meme coin rallies following announcement of President Trump's upcoming dinner with top 220 holders
Official TRUMP rallied 50% on Wednesday after the team behind the meme coin announced plans for its top 220 token holders to have a dinner with President Donald Trump in May. The announcement also included an extension of the token's initial unlock plan by an additional 90 days.
Five fundamentals for the week: Traders confront the trade war, important surveys, key Fed speech Premium
Will the US strike a trade deal with Japan? That would be positive progress. However, recent developments are not that positive, and there's only one certainty: headlines will dominate markets. Fresh US economic data is also of interest.
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.