The EUR/USD pair continues to display resilience, holding steady around 1.0805 and reaching a high of 1.0812, despite expectations that the European Central Bank (ECB) will lower interest rates in June.

This upward trend is largely driven by a weakening U.S. dollar, influenced by a dovish stance from the Federal Reserve and underwhelming U.S. economic data.

In the United States, the dollar’s pressure is compounded by the first quarte

Federal Reserve Influences Dollar Dynamics

r’s nonfarm productivity growth, which was reported at a sluggish 0.3%, significantly below the forecasted 0.8%. The Federal Reserve’s recent decision to maintain interest rates steady at a range of 5.25%-5.50% further dampens the dollar’s strength. Fed Chair Jerome Powell’s comments have indicated no imminent rate hikes, aligning with a strategy to support economic growth over inflation concerns.

European Central Bank’s Anticipated Moves

On the European front, the ECB’s anticipated rate cut in June is expected as long as inflation trends towards the target of 2%. This policy move comes on the heels of the Eurozone’s economic growth unexpectedly rising by 0.3% in Q1, outpacing the predicted growth of 0.1%.

Key Economic Indicators and Events

This week, the EUR/USD price forecast could be influenced by several pivotal events: