![](\"https:\/\/www.financialmirror.com\/wp-content\/uploads\/2024\/01\/oanda-marketpulse-craig-ecb-euro.jpg\")
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By Craig Erlam\u00a0\u00a0<\/strong><\/em><\/p>\n US economic data continues to point to an economy that\u2019s doing very well, despite the various headwinds, including very high interest rates.<\/p>\n GDP data for the fourth quarter easily exceeded expectations, rising 3.3% on an annualised basis, adding to the increasing view that the US could be heading for a fairytale scenario, not just a soft landing.<\/p>\n We\u2019ve spoken a lot about resilience in the US economy over the last couple of years, but that the economy can continue to show such strength and low unemployment with interest rates so high and inflation falling back toward target, is unbelievable.<\/p>\n The European Central Bank left interest rates on hold at 4% on Thursday and claimed inflation is progressing towards its target, while giving no clear guidance on when interest rates will start falling.<\/p>\n We came into the new year with markets pricing in a March rate cut and that is now looking increasingly difficult.<\/p>\n Even with a late pivot \u2013 which was always the likely strategy of the central bank \u2013 policymakers would have to signal that a rate cut is a live possibility over the next six weeks in appearances made between meetings.<\/p>\n That\u2019s not impossible, but it\u2019s arguably not particularly transparent. The data is unlikely to surprise to that degree.<\/p>\n President Christine Lagarde and some colleagues have previously indicated a rate cut in summer may be appropriate, but investors are not convinced we\u2019ll have to wait that long.<\/p>\n Lagarde stuck with that on Thursday while suggesting demand was weaker, as is the economy, and inflation is falling.<\/p>\n Perhaps this is her way of leaving the door slightly ajar for March or maybe the usual lack of clear guidance has left everyone desperately looking for something that isn\u2019t there.<\/p>\n Lagarde and her colleagues probably wanted to give absolutely nothing away, instead opting for an array of vague, uninformative statements that buy them six more weeks before they may have to say or do something.<\/p>\n The euro has drifted lower after the ECB press conference and US data, but it hasn\u2019t broken out of the range it\u2019s traded in over the last week or so.<\/p>\n The correction we\u2019ve seen since the turn of the year appears to be running on fumes, but there\u2019s still a question of whether this is just that, and will turn higher and look to break the highs, or just a continuation of the longer-term sideways trend.<\/p>\n There are some important support levels between 1.07 and 1.0850 which could tell us which is the case.<\/p>\n \u200b<\/p>\n Craig Erlam is Senior Market Analyst, UK & EMEA at OANDA<\/p>\n Opinions are the author\u2019s, not necessarily that of OANDA Global Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. Losses can exceed investments.<\/p>\n","protected":false},"excerpt":{"rendered":" The US economy is performing well, with GDP data for the fourth quarter exceeding expectations. The European Central Bank (ECB) has left interest rates on hold at 4% and has not provided clear guidance on when rates will start falling. The euro has drifted lower after the ECB press conference and US data, but it has not broken out of its recent trading range.<\/p>\n","protected":false},"author":4,"featured_media":2397,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4],"tags":[598,50,534,26,599,51,600,67,54,34,55,375,494,31,380,601,602,18],"class_list":["post-2396","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cyprus","tag-christine-lagarde","tag-ecb","tag-ecb-rate-cut","tag-economy","tag-euro","tag-european-central-bank","tag-eurusd","tag-inflation","tag-marketpulse","tag-markets","tag-oanda","tag-rate-cut","tag-uk","tag-unemployment","tag-us","tag-us-data","tag-us-gdp","tag-world"],"acf":{"keyphrase":"","keywords":"","sourceimg":"","country-category":""},"yoast_head":"\nECB keeps cards close to chest<\/h4>\n
EURUSD rangebound<\/h4>\n