Earlier, Bessent said the U.S. should cut interest rates by 0.5% at the September FOMC meeting. President Trump also said U.S. interest rates should be 1%. These comments led to dollar selling and euro buying.
However, yesterday’s U.S. July Producer Price Index (PPI) was higher than expected, lowering the chance of an early rate cut. As a result, the euro fell to 1.1631. Still, compared to the rise after the August 1 U.S. jobs report, the drop was small. This shows the market still strongly expects the U.S. Federal Reserve (FRB) to cut rates soon.
The 90-day moving average for the euro is still in an upward trend. Even if today’s U.S. retail sales show inflation concerns similar to the PPI, many believe the FRB will keep its plan to cut rates, so the euro’s downside is likely limited.
EUR/USD expected range: 1.1600 (61.8%) – 1.1700
Note: This information does not guarantee profits. Please make your own decisions when trading.