The EURUSD currency pair remains in a tight range above the round-level support of 1.0900 on Monday as it struggles for direction. Investors look for fresh cues at the start of a busy data week that will likely indicate how much the Federal Reserve will cut interest rates in September. For fresh interest rate cues, … Read more
EURUSD remains on the backfoot on Tuesday, slightly above 1.0700, as the major currency pair comes under pressure due to expected decline in the preliminary Eurozone HICP data for June. The annual Harmonised Index of Consumer Prices decelerated to 2.5%, as expected, year-on-year from May’s reading of 2.6%. In the same period, the core HICP, which … Read more
USDJPY spiked higher by over half a percent just after the release of US nonfarm payrolls (NFP) data, on Friday. USDJPY traded in the upper 156s after the US Dollar strengthened as a result of the better-than-expected results. Nonfarm payrolls showed the number of employed people in the US rose by 272,000 in May, when … Read more
The USDJPY pair dropped to 155.50 in early European trading as the US Dollar continues to weaken. Investors are confident that the Federal Reserve will start reducing interest rates from September. The US Consumer Price Index data for April is awaited to provide insight into the interest rate outlook. Economists expect Japan’s Q1 Gross Domestic Product to show a contraction.
The GBPUSD pair is trading around 1.2550 in Asian markets on Monday, with the Sterling-Dollar appreciation attributed to recalibrated expectations for Federal Reserve interest rate cuts in 2024 following lower-than-expected US jobs data. The US economy added 175,000 jobs in April, signaling a slowdown from the previous month. The Fed is now expected to enact its initial rate cut in September, while the Bank of England is expected to maintain rates unchanged at 5.25% during Thursday’s meeting. Investor sentiment regarding interest rate cuts by the BoE has been postponed to September due to concerns about robust wage growth in the UK. BoE Governor Andrew Bailey expressed optimism about meeting the 2% inflation target.
The EURUSD pair is gaining ground due to positive market sentiment and dovish remarks from Federal Reserve Chairman Jerome Powell. Powell dismissed the likelihood of a further interest rate hike and mentioned that progress on inflation has stalled. Traders are awaiting US economic data releases, while the Eurozone may struggle due to a more dovish stance from the European Central Bank. Eurozone inflation held steady in April, with bets for a potential interest rate cut by the ECB in June.
Finance Minister Chrystia Freeland delivered a federal budget that keeps the deficit capped at billion, thanks to higher-than-expected government revenues and new taxes that largely offset new spending. The budget pledges billion in new spending focused on economic justice for younger generations. The government plans to pay for most of its new spending initiatives with higher taxes on the wealthiest Canadians and businesses, including increasing the capital gains inclusion rate. The deficit, deficit-to-GDP ratio, and debt-to-GDP ratio are projected to fall every year until 2028-29. The federal budget also includes initiatives aimed at boosting the economy’s productivity, such as expanding artificial intelligence capacity and research support.
The EURUSD pair maintained its position around 1.0770 on Friday, facing downward pressure due to the European Central Bank officials suggesting a probable interest rate cut in June. Weaker-than-expected retail sales data from Germany also contributed to the Euro’s decline. Meanwhile, the US Dollar Index (DXY) strengthened, nearing 104.60, driven by annualised economic expansion in the United States and hawkish statements from a Federal Reserve official.
The European Commission released a report on Cyprus’ economy, noting that GDP is expected to grow and inflation to decrease. The report also highlighted risks related to interconnections with economies within and outside the EU, as well as vulnerabilities related to debt. The GDP growth rate in 2023 was 2.4%, down from 5.1% in 2022, with expectations of rebounding growth in 2024 and 2025. The Cypriot labor market remains robust, with employment rising and unemployment expected to fall. The country’s fiscal position is strong, with a surplus expected to be maintained. Cyprus’ high integration with EU and non-EU economies makes it susceptible to economic developments in those regions, posing risks to its economy.
Norway’s central bank maintained its benchmark interest rate at 4.50 percent, a 16-year high, and signaled a plan for a single rate cut within the year, which is fewer than most economists anticipated. Governor Ida Wolden Bache indicated a likely rate cut in autumn, possibly in September, with a potential second reduction by the end of March 2025. Following the announcement, the Norwegian crown strengthened against the euro. The forward rate curve for 2024 to 2026 remained largely unchanged, with an expected rate of 4.25 percent at the end of the current year. Norges Bank raised its forecast for economic growth, predicting mainland GDP growth in 2024 of 0.5 percent, up from a 0.1 percent expansion seen previously, with a 2025 estimate maintained at 1.2 percent. It expects core consumer prices to rise by 4.1 percent this year, less than the 4.8 percent previously seen. Core inflation was at 4.9 percent year-on-year in February, above the central bank’s goal of 2.0 percent.