Euro sharpens decline to six-week trough on European rate prospects
Euro fell in European trade on Friday against a basket of major rivals, sharpening losses for the second day against the dollar, plumbing six-week lows and on track for the second weekly loss in a row following the European Central Bank's policy meeting, which bolstered the case for an interest rate cut in April.
A string of strong US data conversely hurt the odds of early US interest rate cuts, especially in March and May.
EUR/USD
EUR/USD fell 0.3% to 1.0813, the lowest since December 13, after losing 0.4% on Thursday, the third loss in four days after the ECB's policy meeting, and strong US GDP growth data.
Weekly Trades
Euro is down 0.8% so far this week against the dollar, on track for the second weekly loss in a row amid renewed concerns about the interest rate gap between Europe and the US.
ECB
As expected, the European Central Bank voted to hold interest rates unchanged at 4.5% this week, the highest in 23 years.
The ECB said that current rates will help achieve the 2% inflation target if maintained for an extended duration.
The ECB said that recent data indeed showed that inflation is declining in the medium term.
Lagarde
ECB President Christine Lagarde said it's still too early to talk about interest rate cuts in the euro zone, however she said that risks to growth are trending down.
She asserted the ECB will rely on fresh data to decline the path ahead for policies, adding that a rate cut in the summer is possible.
European Rates
Following Lagarde's remarks, the odds of an April interest rate cut by the ECB rose to 80%.
Rate Gap
The interest rate gap between Europe and the US currently stands at 100 basis points, the lowest such gap since May 2022.
Recent strong US data delayed the timing of the first interest rate cut by the Federal Reserve, which threatens to widen the gap even further.
Machine learning: Will it help develop fuel cells efficiently?
Japanese university researchers from Osaka and elsewhere developed technology using machine learning to accelerate the discovery of necessary substances for green energy production.
Using the new method, researchers managed to create two new candidate substances for use into solid oxide fuel cells, which can be used to generate energy through clean hydrogen.
According to the results published through Advanced Energy Materials, the method could be used to discover other substances four uses outside the energy sector.
The research team behind the concept expressed their support for hydrogen fuel-cell technologies as carbon-neutral sources of energy, that need more development to be viable.
Using machine learning to analyze the data structure of the substances needed to optimize and produce energy through hydrogen fuel cells was a genuine breakthrough that brought quick results.
Researchers formed two promising substances, each with unique structures, and each has proved capable of contributing to energy production efficiently through fuel cells.
However, practical applications of the method remains a bit far off, but the future is quite promising.
Oil jumps to eight-week high on US demand hopes
Global oil prices rose in American trade on Thursday, hitting eight-week high on hopes for strong US demand.
Official EIA data showed a sharp decline in US crude stocks last week to three-month lows in a sign of strong demand.
US GDP growth also beat expectations in the fourth quarter of last year despite high Fed interest rates, which will underpin fuel demand further.
Global Oil Prices
US crude rose 1.8% to $76.65 a barrel, the highest since December 1, while Brent added 1.5% to $81.45 a barrel.
US crude rose 1.2% on Wednesday, while Brent added 0.75%, as US crude stocks declined with the dollar also losing ground.
US Stocks
The Energy Information Administration reported a drawdown of 9.2 million barrels in US crude stocks in the week ending January 19, passing estimates of a drop of 1.2 million barrels.
Now total stocks fell to 421 million barrels, the lowest since late October.
US Production
The EIA also reported no change in US oil production at 13.3 million bpd, a record high.
US GDP
US GDP growth clocked in at 3.3% in the fourth quarter of 2023, easily beating estimates of 2.0%, and after surging 4.9% in the third quarter.
Such data proves the resilience of the US economy despite high interest rates, in turn hurting the odds of early Federal Reserve rate cuts next March.
Dollar gains ground after strong US data
Dollar rose in American trade on Friday, resuming gains and approaching six-week highs, on active demand following strong US growth data.
US GDP growth beat expectations in the fourth quarter of last year, hurting the odds of early US interest rate cuts in March.
The Index
The dollar index rose 0.2% to 103.44, with a session-low at 103.12, after closing down 0.25% yesterday, away from a six-week high at 103.82.
US GDP
US GDP growth clocked in at 3.3% in the fourth quarter of 2023, easily beating estimates of 2.0%, and after surging 4.9% in the third quarter.
Such data proves the resilience of the US economy despite high interest rates, in turn hurting the odds of early Federal Reserve rate cuts next March.
US Rates
Following the growth data, the odds for a US interest rate cut at the Fed March meeting slid from 44% to 40%, while the odds for such a cut in May fell to 80%.