The single European currency remains close to the levels of 1,09 trying to secure yesterday’s gains as in the wake of President Jerome Powell initial remarks before the Congress there was no surprise and the cautious rhetoric was expressed as a weakness of the American currency which already a little earlier had come into question as preliminary US jobs data disappoints.
Yesterday’s move in the exchange rate was a good attempt to break out of the narrow trading range of the last few days and confirmed that the Euro continues to achieve good reaction behaviors but the question remains on the table whether it is capable of developing a strong upward momentum as the European economy continues to be under question.
A decline in US bond yields was observed for no significant reason with the most likely explanation being that investors expected more aggressive rhetoric from President Powell.
Today’s agenda is extremely rich with the European Central Bank meeting and president Christine Lagarde speech standing out.
Τhere is no chance of any change in monetary policy at today’s meeting so all interest is focused on Lagarde speech on possible comments that will clarify the landscape a bit more if the first cut in key interest rates will happen in June.
At the moment the biggest bets are concentrated on this, as well as the rhetoric of Christine Lagarde herself and other officials of the European Central Bank give good prospects to this possibility, consequently any change in the rhetoric will be a surprise and will strongly affect the exchange rate.
With no major surprises on the table the exchange rate is likely to remain in a tight range as investors are expected to remain cautious ahead of tomorrow’s all-important US new jobs announcement.
As yesterday’s preliminary US jobs data disappointed if tomorrow’s data surprises positively most possible the European currency will lose all recent gains.
