The single European currency remains in a narrow range trading near to 1,0850 level for the fourth day in a row as the very poor agenda and investors caution have greatly reduced the exchange rate’s range.
Monday, as expected, did not give any excitement, the economic agenda was relatively indifferent with the only news announced being investors confidence in the eurozone, which did not show any surprises.
The general picture of the market remains the same with the majority of investors continuing to watch with interest the bets on prospects for cuts in key interest rates from Fed and ECB.
Right now the chances are concentrated on three rate cuts, but the possibility for just two by the Fed is starting to widen slowly.
Τhe US labor sector continues to remain strong, greatly reducing the chances of a recession for the US economy, but the fear that the downward trend in inflation will not continue remains on the table.
Τomorrow’s US consumer inflation data is eagerly awaited and is likely to shift bets on interest rate cut prospects.
Τhe European currency remains in a defensive mode, it maintains the characteristic of good reactions on the table but it is likely it will be difficult to develop again a strong bullish momentum and manage to overcome and stay above the levels of a 1,10.
For today, the most likely scenario is for the trading range to remain narrow and investors to avoid big bets ahead of tomorrow’s critial data. As in addition to inflation in US we have the Fed’s Minutes and ECB’s meeting on Thursday where may not expect any change in rates but President Lagarde comments may give new conclusions.
