The Euro experienced an increase of over 0.39% on Monday as the Greenback showed signs of weakness, influenced by a sell-off driven by US geopolitical concerns and speculation regarding a potential coordinated intervention in the foreign exchange markets by the US and Japan. The EUR/USD is currently positioned at 1.1872, following a rebound from daily lows of 1.1835.
EUR/USD rises amid speculation regarding a coordinated foreign exchange intervention by the US and Japan, putting pressure on the Dollar. Trade-war tensions are back in focus as Trump sets his sights on Canada, even while he has softened tariff threats directed at Europe. The attention now turns to the FOMC decision and Powell’s press conference, which are crucial for gaining insights into policy direction.
> The Euro gains momentum as geopolitical tensions in the US and speculation surrounding foreign exchange intervention lead to widespread selling of the Dollar: The recent advance of the EUR/USD pair was driven by concerns surrounding the trade war last week. US President Donald Trump has removed the 10% tariffs on European nations concerning Greenland, yet he has heightened tensions with Canada by threatening to implement 100% duties should they pursue a trade agreement with Beijing. The US economic calendar highlights the Federal Reserve’s monetary policy meeting as the key macroeconomic event, scheduled for Wednesday, January 28. Money markets appear to be assured that the central bank will maintain current rates, yet the focal point will be the press conference by Fed Chair Jerome Powell, subsequent to the Department of Justice indictment. Recently, Durable Goods Orders surpassed expectations, and market participants will focus on the ADP Employment Change 4-week average, housing statistics, and Consumer Confidence figures on Tuesday. The US Dollar Index, reflecting the value of the dollar against six currencies, has decreased by 0.41%, currently standing at 97.05. In the Eurozone, the Ifo Business Climate Index for Germany remained steady in January compared to the prior month. The Ifo President Clemens Fuest indicated that the German economy is entering the new year with minimal momentum. On Tuesday, the agenda for the EU will include speeches from European Central Bank members Joachim Nagel and ECB President Christine Lagarde. In the United States, data pertaining to employment, real estate, and consumer sentiment is set to be published.
Latest FX Rate Trends: The Euro gains from a weakening US Dollar
- Speculation regarding a possible joint intervention by Japanese and US authorities to bolster the Yen has put pressure on the US Dollar. It is reported that there are indications in the market that the Federal Reserve Bank of New York might have reached out to financial institutions to assess the situation regarding the Yen’s exchange rate.
- In November, US Durable Goods Orders experienced a significant increase, rising 5.3% month-over-month following a 2.1% decrease in October. This figure surpassed expectations of 2.3%, indicating a resurgence in demand for major purchases.
- Orders for core capital goods, an important indicator of underlying business investment, increased by 0.5% month-over-month, surpassing the anticipated 0.3% and showing a notable acceleration from October’s 0.1% rise, suggesting a strengthening investment momentum as the year draws to a close.
- According to Prime Market Terminal data, traders anticipate a reduction of 44 basis points by the Federal Reserve as the year concludes.
- The German Ifo Business Morale recorded a value of 87.6 in January, remaining unchanged from December’s figure. This result fell short of expectations, which anticipated a slight increase to 88.2, as reported.