|

EUR/USD trades with negative bias around 1.1730 amid recovering USD; downside seems limited

  • EUR/USD edges lower during the Asian session on Monday amid a modest USD uptick.
  • The divergent Fed-ECB expectations might continue to act as a tailwind for spot prices.
  • Traders also seem reluctant ahead of the key US NFP report and ECB meeting this week.

The EUR/USD pair kicks off the new week on a softer note, though it remains within striking distance of the highest level since early October, touched last Thursday. Spot prices currently trade around the 1.1730 region, down less than 0.10% for the day.

The US Dollar (USD) edges higher during the Asian session on Monday and looks to build on last week's modest bounce from an over two-month low, which, in turn, is seen acting as a headwind for the EUR/USD pair. The USD uptick, however, lacks any obvious fundamental catalyst and is more likely to remain capped in the wake of dovish Federal Reserve (Fed) expectations.

The US central bank last week signaled caution about further cuts after lowering borrowing costs for the third time this year. Traders, however, are still pricing in a greater possibility of two more rate cuts next year as signs of a weakening labor market are becoming increasingly evident. The prospect of a Trump-aligned Fed chair might keep a lid on the attempted USD recovery.

US President Donald Trump said that he had narrowed the list of contenders to replace Jerome Powell as the next Fed chair and expects his nominee to deliver interest-rate cuts. Trump's chief economic adviser, Kevin Hassett, is seen as the likely choice to succeed the current Fed chief. This might hold back the USD bulls from placing aggressive bets and support the EUR/USD pair.

The shared currency, on the other hand, continues to draw support from the growing acceptance that the European Central Bank (ECB) is done cutting interest rates. Traders, however, seem reluctant and opt to wait for the crucial ECB meeting on Thursday. Moreover, the delayed US Nonfarm Payrolls (NFP) report on Tuesday should provide a fresh impetus to the EUR/USD pair.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD0.07%0.03%0.06%0.04%0.08%0.02%0.04%
EUR-0.07%-0.04%0.00%-0.04%0.00%-0.05%-0.03%
GBP-0.03%0.04%0.04%-0.00%0.04%-0.01%0.00%
JPY-0.06%0.00%-0.04%-0.02%0.02%-0.04%-0.02%
CAD-0.04%0.04%0.00%0.02%0.04%-0.02%0.00%
AUD-0.08%-0.01%-0.04%-0.02%-0.04%-0.06%-0.06%
NZD-0.02%0.05%0.01%0.04%0.02%0.06%0.02%
CHF-0.04%0.03%-0.01%0.02%-0.01%0.06%-0.02%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

More from Haresh Menghani
Share:

Editor's Picks

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold picks up pace, approaches $4,400

Gold rebounds toward the $4,400 mark per troy ounce on Friday, reversing the previous day’s pullback. The precious metal’s recovery comes as fresh and intense weakness keep weighing on the US Dollar, while traders keep assessing easing expectations of an imminent Fed interest rate hike and the situation from the Middle East.

Pi Network Price Forecast: PI extends consolidation as bulls eye $0.10
Pi Network (PI) price holds steady on Friday, maintaining a consolidating tone for three consecutive days. Mild retail strength in the PI token remains stable, with Open Interest above $9 million, while social buzz eases. PI token’s technical outlook is mixed, as bearish momentum wanes to neutral, with bulls eyeing the $0.1000 psychological level.
 Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

Why is Crude Oil priced for a reopening the ships haven't made?
Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.