Category: Forex News

EUR/USD continues to decline | 15 March 2024

By Published On: March 15, 20241.5 min readViews: 1940 Comments on EUR/USD continues to decline | 15 March 2024

Events to pay attention to today:

17:00 EET. USD – Michigan Consumer Sentiment

EURUSD:

The EUR/USD pair continued its downtrend for the second day in a row, hitting a weekly low of 1.0870 during Friday’s Asian session. The EUR/USD’s decline can be explained by the strengthening of the US Dollar, which was fuelled by the release of US Producer Price Index (PPI) data, which pointed to continued inflationary pressures in the economy.

The core US Producer Price Index (PPI) rose 2.0% year-on-year in February, beating expectations of 1.9%. On a monthly basis, the report showed an increase of 0.3% from the previous reading of 0.5%, beating expectations of 0.2%.

In February, the US Producer Price Index (y/y) rose 1.6%, beating both expectations of 1.1% and the previous reading of 1.0%. At the same time, the Producer Price Index (m/m) rose 0.6%, beating market expectations and the previous reading of 0.3%.

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This data complicates the timeline for a rate cut by the Federal Reserve. According to the CME FedWatch tool, the probability of a rate cut in March is 1.0%, falling to 7.7% in May. The odds of a rate cut in June and July are comparatively lower at 59.0% and 79.4% respectively.

The euro is facing fresh headwinds from the dovish stance of European Central Bank (ECB) policymakers. Francois Villeroy de Gallo, one of the ECB’s policymakers, said on Wednesday that a rate cut in the spring remains likely. Also on Thursday, ECB Governing Council member Yannis Stournaras argued in favour of an early rate cut.

Friday will see the release of the preliminary Michigan Consumer Sentiment data. Traders will be focusing on this data ahead of next week’s FOMC meeting.

Trade recommendation: Trade mainly with Sell orders from the current price level

EUR/USD continues to decline

Origin: FreshForex

 


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