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EUR/USD
Source: Newsmaker.id
EUR/USD traded steadily around 1.1635 on Thursday (September 10th), maintaining its position above the psychological level of 1.1600. The euro received support from a weaker US dollar, while market participants opted for caution ahead of the European Central Bank (ECB) interest rate decision and the release of US producer inflation data.
The US dollar is still struggling to gain momentum despite rising US Treasury yields. The dollar index previously held below the 99.00 area, giving the euro and several other major currencies room to strengthen against the greenback.
The main focus of European markets now turns to the ECB meeting on Thursday. The central bank is widely expected to raise interest rates again amid rising inflation risks from surging energy prices. The US-Iran conflict, which pushed Brent to US$100 per barrel, has again raised concerns about price pressures in the eurozone.
Expectations of tighter ECB policy are one of the factors supporting the euro. However, as the interest rate hike has been widely priced in by the market, investor attention will likely be focused on ECB President Christine Lagarde's statement on the inflation outlook and the possibility of further tightening. A more hawkish tone could potentially provide additional support for EUR/USD.
In the United States, the market is also awaiting the release of the August Producer Price Index (PPI) on Thursday and the CPI on Friday. Hotter-than-expected inflation data could increase expectations for a Federal Reserve interest rate hike, strengthening the dollar and potentially pressuring EUR/USD. Conversely, softer inflation could weaken the greenback again and give the euro room to move higher.
Technically, EUR/USD's ability to hold above 1.1600 maintains a positive short-term bias. The 1.1685–1.1710 area is the next important resistance zone, while a drop back below 1.1600 could open the door to a deeper correction. With the ECB decision and US inflation looming, EUR/USD volatility could potentially increase in trading across Europe and the Americas. (CP)