EUR/USD Pair’s Resurgence: Analyzing Global Factors and Upcoming Economic Indicators

Arslan Butt•Monday, September 11, 2023•2 min read

The EUR/USD currency pair exhibits a modest recovery around the 1.0725 mark, following a dip to 1.0697. This recuperation can be attributed to the declining strength of the US Dollar. Concurrently, the US Dollar Index (DXY) has seen a slight pullback, settling at 104.70.

US Treasury Secretary, Janet Yellen, expressed her growing confidence on Sunday regarding the US’s capability to manage inflation without precipitating significant disruptions in the employment sector. She emphasized the dissipating inflation indicators, coupled with the absence of any notable surge in layoffs.

Support for the prolonged elevation in US interest rates emerges from the positive US economic data presented last week. Market sentiment, as captured by the CME FedWatch Tool, indicates a 93% probability of interest rates remaining constant in the upcoming September meeting, and a 43.5% likelihood of an increase come November. This could potentially enhance the US Dollar’s value, placing a ceiling on the EUR/USD’s ascent.

Fed Governor, Christopher Waller, indicated the Federal Reserve’s latitude in interest rate adjustments, contingent on prevailing data. Fed Boston’s President, Susan Collins, spotlighted the perils of an overly constrictive monetary approach and advocated for a meticulously calibrated policy. Meanwhile, Chicago Fed’s President, Austan Goolsbee, underscored the institution’s ambition to steer the economy towards an optimal trajectory, a path where inflation decelerates without triggering a downturn.

From a European perspective, industry experts anticipate that the European Central Bank (ECB) will retain its current interest rate during the forthcoming policy meeting. Recent data from Destatis revealed that Germany’s Harmonised Consumer Price Index (HICP) for August matched market predictions at 6.4% YoY, while the core CPI remained consistent at 6.1%. Moreover, the Eurozone’s GDP witnessed a 0.1% increase in Q2, juxtaposed against the prior quarter’s 0.3%.

Investor attention is set to converge on Wednesday’s unveiling of the US Consumer Price Index (CPI) for August, expecting a 0.5% monthly rise and an unchanged core figure of 0.2%. Thursday’s focus will pivot to the ECB’s monetary policies, potentially offering clarity on the EUR/USD’s trajectory.

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ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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EUR/USD Pair’s Resurgence: Analyzing Global Factors and Upcoming Economic Indicators

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EUR/USD Pair’s Resurgence: Analyzing Global Factors and Upcoming Economic Indicators

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