April 25, 2024

EUR/USD Reaches a High Point of Four Weeks Over 1.1160 as US Dollar Gets Weaker

Two Days of Steady Rise

The EUR/USD currency pair has risen further in the course of the North American session as it also successfully printed a new high point over what it had in four weeks at an impressive 1.1170. This is the second straight day that the pair will be making this impressive rise as it heads stately to its highest end of the month yet.

EUR/USD price chart. Source TradingView

The recent weakness in the US dollar has kept the bullish tones that accompanied the EUR/USD pair for a couple of weeks quite intact. Likewise, some technical events added their quota of support to the upside of the pair. It is presently holding firmly over 1.1100 as it has equally broken through the 1.1135 area of resistance.

The US dollar index is now trading at a weekly low point of about 97.75 while the yields of the US Treasury continue to slide. The ten-year bond yield is at 2.36%, far from the 2.43% mark it struck in the early part of the day. Stock prices in Europe finished the trading day on a low note as skepticism grew over the withdrawal of Russian troops from Kyiv. On Wall Street, the low levels of stocks are evident while the high price of commodities keeps weighing heavily on the US dollar.  

Inflation Hit New Levels in the Eurozone While the US Creates More Jobs

The inflation reports coming from Germany are far above what was expected as the yearly rate has reached 7.3%, the highest rate it has seen since 1981. Continuously increasing commodity prices is creating a challenging and complex environment for the European Central Bank.

The Head of Macro’s Global arm with ING, Carsten Brzeski has said that the European Central Bank will prioritize focusing on inflationary expectations, and inasmuch as those set of expectations keep being relatively stable, the market may expect to see an end of the widely said to be unconventional moves that have been in motion within the next one year. He clarified this to be an end to deposit rates that are negative, and also to net asset buying.

He stated further that for this to happen, there would have to be an end to the war, sanctions against Russia have to be lifted, and there have to be stimulus packages stepped up so the European Central Bank can carry out more tightening policies.  

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