Blog Details

EUR/USD Gains Amid US Dollar Weakness

EUR/USD Gains As The US Dollar Struggles To Find Stability. The Currency Pair Benefits From Market Expectations That The Federal Reserve (Fed) Will Keep Interest Rates Unchanged. Investors Are Closely Watching The Fed’s Upcoming Policy Decision, Which Could Further Impact USD Movements.

Federal Reserve Expected To Hold Rates Steady

The Fed Is Widely Expected To Maintain Its Interest Rate Range At 4.25%-4.50%. According To The CME FedWatch Tool, This Will Mark The Second Consecutive Meeting Where Rates Remain Unchanged. Policymakers Favor A Cautious Approach Due To Economic Uncertainties. US President Trump’s Tariff Policies Add To These Concerns, As They Could Drive Inflation Higher And Slow Economic Growth.

Impact Of Trump’s Tariffs On The US Economy

Market Participants Fear That Trump’s Reciprocal Tariffs Could Lead To Economic Instability. The Organization For Economic Cooperation And Development (OECD) Recently Lowered Its US Growth Forecasts. The US Economy Is Projected To Expand By 2.8% In 2024 But Could Slow To 2.2% In 2025 And 1.6% In 2026. Additionally, Rising Trade Barriers May Fuel Global Inflation.

German Debt Deal Supports The Gains Of EUR/USD

EUR/USD Gains Additional Support From Optimism Over Germany’s Debt Restructuring Deal. The Bundestag Is Set To Vote On A 500 Billion Euro Infrastructure Fund, Which Aims To Increase Government Spending. If Approved, The Deal Could Boost Germany’s Economic Growth And Inflation, Strengthening The Euro Further.

The German Debt Plan Has Already Led To Speculation That The European Central Bank (ECB) Might Pause Its Monetary Easing Cycle. The ECB Has Cut Interest Rates Six Times Since June 2024, But Policymakers Are Now Reconsidering Further Reductions Due To Rising Inflation Risks.

Key Market Events To Watch

Traders Are Also Monitoring Developments In US-Russia Peace Negotiations. A Recent 30-day Ceasefire Agreement With Ukraine Has Raised Hopes For Further Diplomatic Progress. However, Skepticism Remains As European Union (EU) Officials Question Russia’s Intentions.

On The Technical Side, EUR/USD Gains Near The Five-month High Of 1.0950. The Pair Remains Above The 200-day Exponential Moving Average (EMA) At 1.0655, Indicating A Bullish Trend. Key Support Is Seen At 1.0630, While The Next Resistance Level Is At 1.1000.

Stay Updated With The Latest Forex News And Analysis On Our Website: https://rishardbell.com/en/traders-corner-blog