Yesterday, the Eurozone HICP inflation rate remained at 2.7%, as expected, unchanged from the previous month. However, France’s CPI was weaker than expected, keeping speculation about further ECB rate cuts alive.
In contrast, strong U.S. economic data (JOLTs Job Openings and ISM Non-Manufacturing PMI) released during the New York session caused U.S. long-term interest rates to rise. The euro, which had been steady and reached a high of 1.0434, dropped to 1.0344 by the close.
The euro’s recovery from the previous day reversed, and the trend of Euro weakness continued due to strong U.S. economic performance and differences in monetary policy between the U.S. and Europe. However, President-elect Trump’s comment that ‘interest rates are too high’ could limit the dollar’s gains in the short term. As a result, the euro’s recent low of 1.0225 (set on January 2) may act as a near-term support level.
Expected Range for EUR/USD: 1.0460 –1.0340
Note: The above information is not a guarantee of profits. Please make your own decisions when trading.