EUR/USD declines to 1.0550 amid expectations of ECB rate cut | 09 Diciembre 2024

EURUSD:

The EUR/USD currency pair is trading with a slight negative bias near 1.0550 during Asian trading hours on Monday. Investors will be monitoring the release of the US Consumer Price Index (CPI) report for November, scheduled for publication on Wednesday. The European Central Bank's (ECB) interest rate decision will be the primary focus on Thursday. Investors will be seeking indications as to the likely course of future events.

There was a rise in expectations for a quarter-point rate cut by the Federal Reserve (Fed) on 18 December last week, following the release of the jobs report, which showed strong job gains. However, these gains were not at a pace that would necessarily deter Fed officials from cutting rates to 4.25-4.5% from the current range of 4.5-4.75%.

Amid high hopes of a US interest rate cut later this month, Wednesday's inflation data could present the only potential obstacle to a third consecutive Fed rate cut. Analysts anticipate that annual consumer price inflation will increase from 2.6% in October to 2.7% in November. The forecast for core inflation, which excludes volatile food and energy prices, is for it to remain unchanged at 3.3% year-on-year in November.

The European Central Bank (ECB) is anticipated to implement a fourth interest rate reduction in a year at its concluding policy meeting in 2024 on Thursday. Analysts anticipate that the ECB will adhere to its data-dependent guidance, reiterating that it 'makes no prior commitment to a specific rate path'. However, ECB President Lagarde's press conference may offer insights into the interest rate outlook. Any dovish remarks from ECB policymakers could influence the Euro (EUR) exchange rate against the US Dollar.

Trading recommendation: We follow the level of 1.0550, when fixing above it we consider Buy positions, when rebounding we consider Sell positions.

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