EUR/USD: The Euro is struggling to maintain some gains

January 17, 2024 10:54 AM +07:00 - The single European currency remains below the 1,06 level as after yesterday's upward movement despite temporarily breaking the level was unable to secure it and remain above it.

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President Jerome Powell in his speech yesterday, although he was not entirely clear, hinted that the intention of the Federal Central Bank of the United States is to leave interest rates steady as long as the inflation path continues to be downward and the economy remains stable.

Still, while bets for another 25 basis point increase have narrowed considerably, they have not gone to zero.

Some market players continue to believe that by the end of the year there will be some surprise and the Fed will raise interest rates by another 25 basis points based mainly on the good pace of the US economy and the particularly resilient sector of the labor market.

Yesterday's picture of the market did not give any surprise, the economic news that was announced was close to the estimates without giving any strong direction and as expected the mild upward momentum of the European currency did not have much continuity, but it is noteworthy that the reaction behavior for the Euro remains on the table.

Geopolitical instability which remains high on the agenda and pressures on international stock markets remain a drag on the European currency and was one of the main reasons the 1,06 level could not be easily secured.

Τoday's agenda is extremely poor and apart from the producer inflation that was announced earlier for the German economy and showed that the path of de-escalation of inflationary pressures continues but without any big surprise there is nothing else important that could create some intense volatility in the markets.

In any case, geopolitical developments are capable of creating shock situations in the markets and for this reason the thought of maintaining a wait-and-see attitude remains.

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