The euro has edged above the highs from this week and last week to notch a fresh high dating back to October 2021. The nearly four year high comes with European leaders pledging to boost NATO spending in what could be a precursor to looser fiscal rules in the eurozone.
The US dollar is also struggling broadly this week as flows from the Iran-Israel war unwind on the ceasefire. The rally in the euro is part of a broader trend that kicked off on higher German fiscal spending following this year's election and Trump's trade war. A look at the monthly chart highlights the impressive gains from a double bottom at 1.02.
The swing factor for the US dollar in the shorter term will be inflation and the possibility of US rate cuts. The ECB has recently moved to the sidelines, at least for the time being. In contrast, this week Morgan Stanley forecast 7 Fed quarter-point rate cuts next year.
Critical in that calculation will be US inflation data, starting with tomorrow's PCE report. If tariff impacts are absorbed without significantly boosting prices, then a series of rate cuts could weigh on the dollar. At the moment, the market is pricing in 104 bps in easing in the coming year but that's been volatile and changeable. This week, Fed Governor Bowman indicated that she would be willing to cut in July, boosting the dovish path.
As for the chart, the monthly image above highlights little in the way of major resistance until 1.20 or 1.22. This week's strong rebound to new long-term highs is also a positive sign.
This article was written by Adam Button at www.forexlive.com. Read More Details
Finally We wish PressBee provided you with enough information of ( Euro rises to a fresh high since 2021 )
Also on site :
- Country Star’s Surprise Photo Has Fans All Saying the Same Thing
- Israeli attacks kill at least 51 as Trump signals progress in Gaza talks
- New Trump directive to dismiss asylum claims for undocumented migrants