![](\"https:\/\/www.financialmirror.com\/wp-content\/uploads\/2023\/09\/oanda-craig-euro-ecb.jpg\")
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The EURUSD extended its downside to near five-month low around 1.0660 on Friday, with the major currency pair falling sharply on firm speculation that the European Central bank will begin reducing interest rates from the June meeting.<\/p>\n
The ECB kept its key borrowing rates unchanged at 4.5% on Thursday to maintain downward pressure on the consumer price inflation.<\/p>\n
In the monetary policy statement, the ECB said that restrictive financial conditions and interest rate hikes yet made are weighing on the overall demand and pushing downward pressure on inflation.<\/p>\n
Also, the ECB said that it will remain data-dependent to determine how long interest rates are needed to remain restrictive. The central bank refrained from committing to any particular rate path.<\/p>\n
The speculation for ECB pivoting to rate cuts from June strengthened after President Christine Lagarde said that if a fresh assessment increased policymakers\u2019 confidence that inflation is heading back to target, then it \u201cwould be appropriate\u201d to cut interest rates, Reuters reported.<\/p>\n
Meanwhile, the market sentiment is downbeat as traders pare big bets leaning to the Federal Reserve beginning to reduce interest rates from the June meeting.<\/p>\n
S&P 500 futures have posted losses in the European session. 10-year US Treasury yields fell slightly after refreshing more than four-month high near 4.60%. The US Dollar Index (DXY), which tracks the US Dollar\u2019s value against six major currencies, jumped to a near five-month high around 106.00.<\/p>\n
Going forward, investors will shift focus to the monthly Retail Sales data on Monday. Retail sales is a leading indicator of consumer spending. Higher retail sales suggests robust consumer spending, which leads to a stubborn inflation outlook.<\/p>\n
(Source: OANDA)<\/p>\n","protected":false},"excerpt":{"rendered":"
The EURUSD fell to a near five-month low around 1.0660 due to speculation that the European Central Bank will begin reducing interest rates from the June meeting.<\/p>\n","protected":false},"author":4,"featured_media":7959,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[1902,4601,598,5732,1498,4138,3832,2369,4893,260,2620,2621,50,534,599,1251,51,600,372,52,67,899,374,1401,3404,3707,4749,54,34,1346,55,4833,4843,3775,5838,375,4158,6106,1959,3480,1827,973,380,1124,5126,57,18],"class_list":["post-7958","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-other","tag-bank","tag-central-bank","tag-christine-lagarde","tag-conditions","tag-confidence","tag-consumer-spending","tag-currency","tag-data","tag-demand","tag-dollar","tag-dollar-index","tag-dxy","tag-ecb","tag-ecb-rate-cut","tag-euro","tag-eurodollar","tag-european-central-bank","tag-eurusd","tag-fed-rates","tag-federal-reserve","tag-inflation","tag-interest","tag-interest-rate","tag-interest-rates","tag-investors","tag-leading-indicator","tag-market-sentiment","tag-marketpulse","tag-markets","tag-meeting","tag-oanda","tag-policy","tag-president","tag-pressure","tag-price","tag-rate-cut","tag-retail-sales","tag-sales","tag-speculation","tag-spending","tag-statement","tag-treasury","tag-us","tag-us-dollar","tag-us-dollar-index","tag-us-fed","tag-world"],"acf":{"keyphrase":"","keywords":"","sourceimg":"","country-category":""},"yoast_head":"\n