Dollar Strengthens, Euro Under Pressure: EUR/USD Continues to Weaken, What's Happening?
The EUR/USD exchange rate weakened again for the third consecutive day and traded around 1.1640 in Asian trading on Thursday. This weakening occurred because the US dollar strengthened after US economic data showed better-than-expected results.
The dollar's strengthening was driven by increases in US Retail Sales and the Producer Price Index (PPI). Retail sales rose 0.6%, well above expectations, while the PPI rose 3% annually. This data indicates the US economy remains strong and reduces the likelihood of an interest rate cut in the near future.
Labor data also supported the dollar. The US unemployment rate declined, reinforcing the view that the Federal Reserve will keep interest rates high for the next few months. Some analysts have even begun to postpone their forecasts of an interest rate cut until mid-year.
Meanwhile, the euro remains under pressure. Statements from European Central Bank officials indicate a cautious stance amid global uncertainty. The ECB is considered in no rush to raise interest rates as the risk of an economic slowdown still looms over the European region.
ECB officials also highlighted geopolitical risks that could depress economic growth. Although inflation is slowly improving, high uncertainty is preventing the euro from recovering. This situation makes EUR/USD vulnerable as long as the US dollar continues to be supported by solid economic data. (az)
Source: Newsmaker.id
