Euro heads for weekly gain against dollar on US rate cut bets

Euro rose on Friday against a basket of global currencies to maintain its gains for the third day in a row against US dollar, heading for the first weekly gain in the last three weeks against the US currency, on strong prospects for US interest rate cuts after Jerome Powell testimony before Congress, while Euro's gains are curbed due to the increased speculations of an easing European monetary policy and interest rates cuts, following the issuance of the minutes of the last European Central Bank's meeting.

As of 07:15 GMT, EUR/USD rose 0.15% to trade at $1.1270, from the opening price of $1.1253, with a high of $1.1274 and a low of $1.1249.

Euro ended yesterday's trading up by 0.05% against US dollar, its second daily gain in a row, down from a rise by 0.3% after positive data on the pace of inflation in the United States, and after the European Central Bank meeting minutes.

Over the course of the week, euro has soared 0.4% against dollar, making its first gain in the last three weeks, due to expectations of US interest rate cuts that have increased after the Federal Reserve Chairman Jerome Powell's testimony before the US Congress.

Powell's mostly pessimistic comments bolstered expectations that the Federal Reserve would cut the US interest rates by 50 basis points the next meeting by the end of this month, and to keep the market under scrutiny for further signs of the big cut.

Yesterday's inflation data in the US, came better than economists' expectations for June, and trimmed expectations of a significant cut in US interest rates this month, but a 25 base point cut is widely agreed upon in the market.

Meanwhile, the minutes of the ECB's latest meeting on Thursday showed that the members of the bank agreed on the need to prepare for further stimulus to the euro zone economy in an increasingly uncertain environment.

The ECB has indicated that this situation may extend in the future, so the bank should be prepared to further easing in the monetary policy.

The details of the minutes boosted speculations that the bank would ease European monetary policy and cut interest rates this year to counter the repercussions of the global trade war and Britain's withdrawal from the EU.