EUR/USD falls off 2-week high, ahead of European summit and ECB meeting

Euro fluctuated in a narrowly bearish range during the Asian session, to continue to bounce off its highest since March 27 against the US dollar for the second straight session, on the threshold of the upcoming European summit in Brussels and the release of economic data expected on Wednesday by the US and the eurozone economies.

At 05:12 GMT, EUR/USD fell 0.02% to 1.1261, compared to the opening at 1.1263, with the highest at 1.1267 and the lowest level at 1.1256.

The markets are currently looking for France, the eurozone's second-largest economy, to release its reading for its Industrial Production Index, which may show a 0.5% drop from January's rise of 1.3%, before the release of the same indicator for Italy, the third largest economy in the region, which may also show a 0.5% drop compared to a rise of 1.7% in January.

This comes amid the markets' anticipation for the European summit in Brussels, which is expected to focus on the Brexit file and to respond to British Prime Minister Theresa May's request to postpone the departure of her country from the Union until the end of June, in addition to discussing the Union's trade negotiations with China and the United States.

Especially after US President Donald Trump announced on Tuesday via his official account on Twitter, his intentions to impose $11 billion in tariffs on European exports to the United States, while addressing the fact that the World Trade Organization sees the European Union's support for Airbus have negative impact On his country, adding that the Union benefited from trade with the United States for a long time and it should stop soon.

This comes hours before the European Central Bank (ECB) meeting on Wednesday, during which ECB monetary policymakers may keep interest rates at zero levels, before we see the upcoming talk by ECB President Mario Draghi, as he has announced at the previous ECB meeting a new round of a long-term target refinancing operations (TLTROs) to be launched by September of this year until March 2021 with a two-year maturity at zero interest levels.

On the other hand, the markets are currently waiting for the US economy to release inflation data, with the release of the consumer price index, which may reflect a rapid growth rate of 0.3% versus 0.2% in February, while the core reading of the same index may also show an increase by 0.2%, alongside the index' annual reading, which may show the growth accelerating to 1.8% versus 1.5%, while the core annual reading may show growth stability at 2.1%.

This comes before the talk of the FOMC and Federal Reserve's member, Randall Quarles, about the progress on the transition to risk-free rates at the Financial Stability Board Roundtable, in Washington DC, leading to the reveal of the Federal Committee meeting minutes, which held on 19-20, during which rheFOMC agreed to keep the intrest rates between 2.25% and 2.50%.

The Federal Open Market Committee (FOMC) agreed at its last meeting to gradually reduce its bond buyback until September, amid lowering their forecasts for growth, while rising their unemployment expectations, as well as trimming their expectations for an interest rate hike in the current year, while expectations for a one-time increase next year were kept up in 2020.