![](\"https:\/\/www.financialmirror.com\/wp-content\/uploads\/2023\/06\/oanda-marketpulse-craig-ecb-rate-hike-euro.jpg\")
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The EURUSD pair is stuck in a tight range around 1.0850 in Monday\u2019s European trading, in a calm start to the week ahead of the release of inflation data on both sides of the Atlantic on Friday.<\/p>\n
The currency pair exhibits strength as European Central Bank policymakers avoid to commit about extending the rate-cut cycle beyond the June meeting.<\/p>\n
ECB policymakers do not want to promise more rate cuts, as they seem to be concerned that aggressive policy easing could revamp price pressures again.<\/p>\n
In this context, traders have dialled back expectations of three rate cuts this year and see only two due to recent economic indicators signalling persistent price pressures, such as the Negotiated Wage Rates for the first quarter and the preliminary HCOB Composite Purchasing Managers Index (PMI) data for May.<\/p>\n
Higher wage growth deepens households\u2019 pockets, which leads to a significant rise in consumer spending that fuels inflationary pressures.<\/p>\n
However, ECB board member and Bundesbank President Joachim Nagel downplayed the effect of higher wage growth, stating that it is a lagging indicator and the long-term trend is expected to remain soft.<\/p>\n
On the economic front, Germany\u2019s Ifo released data on Business Climate, Current Assessment and Expectations for May. The overall data missed estimates, however, the Euro remains unchanged.<\/p>\n
The German Ifo Business Climate Index dipped slightly\u00a0to 89.3 from 89.4 in April, while investors forecasted a sharp rise to\u00a090.3.<\/p>\n
The Current Economic Assessment Index declined to 88.3 from 88.9 in April, missing the consensus of 89.9.<\/p>\n
The Ifo Expectations Index, which indicates firms\u2019 projections for the next six months at 90.4,\u00a0fell short of the market consensus of 90.5 but remains higher than the former reading of 89.7.<\/p>\n
(Source: OANDA)<\/p>\n","protected":false},"excerpt":{"rendered":"
The EURUSD pair is trading around 1.0850 in a tight range. ECB policymakers are hesitant to commit to further rate cuts beyond June due to concerns about reviving price pressures. Traders have lowered expectations of three rate cuts to two this year. Higher wage growth is leading to increased consumer spending and inflationary pressures. Germany’s Ifo Business Climate data for May missed estimates, with the Business Climate Index, Current Economic Assessment Index, and Expectations Index all falling short of expectations.<\/p>\n","protected":false},"author":4,"featured_media":13355,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[8625,7667,1902,186,3768,4601,2577,4138,3832,2369,50,534,6264,599,1923,51,7689,600,2624,4818,576,3767,11396,8304,67,6190,3404,54,34,1346,3747,55,8875,4833,10097,4843,5838,2089,10779,1354,8183,1623,6928,3480,6377,380,651,5673,1198,18],"class_list":["post-13354","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-other","tag-april","tag-assessment","tag-bank","tag-business","tag-business-climate","tag-central-bank","tag-concerns","tag-consumer-spending","tag-currency","tag-data","tag-ecb","tag-ecb-rate-cut","tag-economic-indicators","tag-euro","tag-euro-dollar","tag-european-central-bank","tag-eurozone","tag-eurusd","tag-eurusd-pair","tag-expectations","tag-germany","tag-growth","tag-ifo-survey","tag-indicators","tag-inflation","tag-inflation-data","tag-investors","tag-marketpulse","tag-markets","tag-meeting","tag-missing","tag-oanda","tag-pmi","tag-policy","tag-policymakers","tag-president","tag-price","tag-price-pressures","tag-rate-cuts","tag-release","tag-released","tag-revamp","tag-six","tag-spending","tag-strength","tag-us","tag-us-inflation","tag-us-inflation-data","tag-wage-growth","tag-world"],"acf":{"keyphrase":"","keywords":"","sourceimg":"","country-category":""},"yoast_head":"\n