Euro sharpens decline to two-month trough on the interest rate gap

Economies.com
2024-04-02 07:21AM UTC

Euro Performance Declines

Euro declined in European trade on Tuesday against a basket of major rivals, sharpening losses for the second straight day against the dollar and plumbing a two-month trough on concerns about the US-Eurozone interest rate gap.

Market Sentiment

Markets are now convinced of the possibility that the European Central Bank will cut interest rates in June, with traders awaiting important European inflation data later today and tomorrow to have a better picture.

EUR/USD

  • EUR/USD fell 0.2% to 1.0725, the lowest since February 14, with a session-high at 1.0744, after losing 0.4% on Monday, the fourth loss in five days following strong US manufacturing data.

Interest Rate Gap

The current US-Europe interest rate gap stands at 100 basis points, the lowest since May 2022, and is expected to expand to 125 basis points next June if the ECB went ahead with a rate cut while the Federal Reserve abstained.

European Rates

  • Recent bearish remarks by several ECB policymakers bolstered the case for an early interest rate cut in June, with markets estimating a total of 90 basis points of rate cuts this year.

Inflation Data

Later today, consumer prices data for Germany and other European countries will be released, while tomorrow, data for the whole euro zone will be released.

Euro Performance Estimates

Credit Agricole’s forex analysts expect the dollar to outperform the euro relatively, as the euro is exposed to potential downward inflationary shocks this week.

For more insights and updates on the euro's performance, stay tuned.

Forex and Currency News

Forex News

Forex

Fed Chair: Driving down inflation towards target could take longer than expected
2024-04-16 20:10PM UTC
Fed Chair Jerome Powell said in a symposium earlier today that inflation has stiffened and held in ...
Forex News

Forex

US retail sales beat expectations in March
2024-04-15 12:39PM UTC
US retail sales rose 0.7% in March, beating estimates of a 0.4% increase, while down from 0.9% in ...
EUR/USD news

Forex

Euro tries to recoup from five-month trough amid bearish outlook
2024-04-15 08:41AM UTC
Euro rose in European trade on Monday against a basket of major rivals amid attempts to recoup from ...

Forex Technical Analysis

GBP USD Analysis

Forex

The GBPUSD forecast update 16-04-2024
2024-04-16 09:48AM UTC
GBPUSD Price Forecast The GBPUSD price fluctuates positively now to head towards potential test ...
EUR USD Analysis

Forex

The EURUSD price forecast update - 16-04-2024
2024-04-16 09:48AM UTC
EURUSD Price Forecast The EURUSD price finds good support at 1.0600$ barrier, to show some ...
EUR GBP Analysis

Forex

The EURGBP tends to resume the decline – Forecast today – 16-4-2024
2024-04-16 05:51AM UTC
EURGBP Price Analysis Expected Scenario The EURGBP pair confirmed its affection by the ...