Trending
eurusd
Source: Newsmaker.id
The euro strengthened against the US dollar during early European trading on Thursday (August 27). The EUR/USD pair rose to around 1.1655, supported by expectations that the European Central Bank (ECB) will maintain a hawkish stance.
Markets now price in a nearly 96% probability that the ECB will raise the deposit rate to 2.50% at its September meeting. These expectations follow the ECB's earlier policy tightening in June aimed at curbing inflationary pressures.
Support for the euro also stemmed from comments by ECB official Isabel Schnabel. She assessed that borrowing costs still need to rise further, as the prolonged conflict in the Middle East and a stronger-than-expected Eurozone economy could exacerbate inflation risks.
Eurozone economic data further bolstered positive sentiment toward the euro. Business activity in the region reportedly grew at its fastest pace this year, signaling economic resilience despite geopolitical pressures and high interest rates.
From the United States, the Federal Reserve's preferred inflation gauge showed core PCE holding steady at 3.3% year-on-year in July, in line with market expectations. Meanwhile, headline PCE rose 3.7% year-on-year and increased 0.2% month-on-month, surpassing the forecast of 0.1%.
Newsmaker Analysis: EUR/USD continues to draw support from hawkish ECB expectations, particularly as the market remains convinced a September rate hike is virtually certain. However, the euro's upside potential could be limited if US data remains robust and Kevin Warsh’s speech at Jackson Hole signals a hawkish tone. The 1.1650 level serves as a key initial support; if it holds, EUR/USD could test the 1.1700 mark, whereas a US dollar recovery risks pushing the pair back into a correction. (asd)
Source: Newsmaker.id