-
EUR/USD trades with modest gains near 1.1070 amid light trading volume.
-
The hawkish remarks from the European Central Bank (ECB) boost the Euro against the USD.
-
The markets anticipate the Federal Reserve (Fed) to cut rates as early as March next year.
The EUR/USD pair posted modest gains after retreating from a monthly high of 1.1139 in early Asian trading hours on Friday. At press time, the major pair is trading at 1.1070, up 0.04% for the day.
That said, the dovish stance of the European Central Bank (ECB) provides some support to the Euro (EUR) and acts as a tailwind for the EUR/USD pair. ECB policymakers pushed back against market expectations and highlighted that the central bank’s policy decisions are data-driven and not influenced by market prices or deadline pressures.
In contrast to the ECB, the Federal Reserve (Fed) has been rather dovish, and traders expect the US central bank to cut interest rates next year. Markets have priced in a more than 87% chance of a rate cut at the March meeting, according to the CME FedWatch tool.
U.S. initial jobless claims for the week ended Dec. 23 showed 218,000 new jobless benefit seekers, up from 206,000 the previous week, worse than market forecasts of 210,000. US pending home sales in November were flat at 0% and weaker than the expected 1.0%.
The market is likely to remain quiet during the last trading day of 2023. Preliminary readings of Spain’s December Consumer Price Index (CPI) and US Chicago Purchasing Managers’ Index (PMI) are due on Friday.
EUR/USD
