The EUR/USD pair is experiencing mild downward pressure around the 1.0300 mark during Friday’s Asian trading session. The US Dollar (USD) continues to benefit from the Federal Reserve’s (Fed) decision to delay interest rate cuts, which has led to selling pressure on the Euro (EUR). Market participants are also awaiting the release of the crucial US December Nonfarm Payrolls (NFP) report later today.
Several Federal Reserve officials have expressed caution regarding rate cuts, citing persistent inflation and uncertainties surrounding the incoming administration of President Donald Trump. Fed Bank of Boston President Susan Collins emphasized the need for a cautious approach to future rate reductions due to significant economic uncertainty.
Fed Governor Michelle Bowman added that interest rates are likely to remain on hold for now until inflation shows a consistent downward trend. These hawkish comments from Fed policymakers are expected to support the USD against the EUR in the short term.
Eurozone Data Fails to Boost Euro Ahead of US Jobs Report
In contrast, data from the Eurozone failed to provide any significant support to the Euro. Eurostat reported that Retail Sales in the region rose by 1.2% year-on-year in November, a slowdown from a revised 2.1% increase in October. While the figures were positive, they fell short of expectations, failing to boost the shared currency.
Furthermore, the preliminary Harmonized Index of Consumer Prices (HICP) data for December has led to a delay in expectations for a large rate cut by the European Central Bank (ECB). This development may help to limit the Euro’s losses in the near term, as traders adjust their outlook on the ECB’s monetary policy.
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