EUR/USD hovers near 1.0900 with an improved risk appetite

  • EUR/USD received support after the lower CPI and Retail Sales data released on Wednesday.
  • US Dollar depreciated due to lower US Treasury yields.
  • The Euro appreciates on increasing expectations for a convergence in monetary policy between the Eurozone and the US.

EUR/USD treads water to continue its winning streak for the fourth session, trading around 1.0880 during the Asian hours on Thursday. The US Dollar’s (USD) decline is contributing to pressure on the EUR/USD pair, which could be attributed to the improved risk appetite.

On Wednesday, the lower-than-expected monthly Consumer Price Index (CPI) and Retail Sales data in the United States (US) supported the probability of multiple rate cuts by the Federal Reserve (Fed) in 2024. US CPI decelerated to 0.3% month-over-month in April and came in at a lower-than-expected 0.4% reading. While Retail Sales flattened, falling short of the expected increase of 0.4%.

The US Dollar Index (DXY), which gauges the performance of the US Dollar (USD) against six major currencies, hovers around 104.20. The decline in the US Treasury yields is weakening the Greenback. The 2-year and 10-year yields on US Treasury bonds stand at 4.71% and 4.32, respectively, by the press time.

On the Euro side, on Wednesday, the seasonally adjusted Gross Domestic Product (GDP) for the Eurozone expanded by 0.3% quarter-on-quarter in the first quarter, meeting expectations. This growth signals a recovery from the 0.1% contraction experienced in each of the previous two quarters. Additionally, the annual growth rate matched expectations at 0.4%.

The Euro receives support from increasing expectations for a convergence in monetary policy between the Eurozone and the United States (US). The European Central Bank (ECB) is anticipated to lower rates during its upcoming meeting in June. While, market expectations are rising for the Fed to commence interest rate cuts from September, particularly after core inflation slowed in April for the first time in six months.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Related Articles

Back to top button