- EUR/USD reclaims territory near 1.0880 after drop into 1.0820.
- German Consumer Confidence declined to 11-month low.
- US PCE inflation eased more than expected, but spending remained high.
EUR/USD recovered recent losses on Friday, recovering back into familiar technical levels. Still, overall gains remained limited after German Consumer Confidence backslid to almost a one-year low as economic conditions in Europe remain tepid at best.
US Personal Consumption Expenditure (PCE) Price Index inflation figures eased more than expected, but further gains in December’s Personal Spending alongside an unexpected uptick in Pending Home Sales trimmed rate cut expectations. With the US domestic economy continuing to bump along at a healthy clip, market hopes for early and deep rate cuts from the Federal Reserve continue to wilt.
Daily digest market movers: EUR/USD pares losses despite determined Greenback
- EUR/USD slipped into multi-week lows early Friday after German Gfk Consumer Confidence in February declined to an 11-month low of -29.7 versus the forecasted improvement from -25.1 to -24.5.
- The US Dollar broadly recovered after US YoY Core PCE Price Index figures in December eased to 2.9% from the forecast of 3.0%, previous 3.2%.
- Despite the easing in inflation, US Personal Spending and Pending Home Sales both stepped higher.
- Personal Spending rose 0.7% in December versus the 0.4% forecast, with the previous month’s print getting revised to 0.4% from 0.2%.
- US Pending Home Sales climbed 8.3% in December compared to the expected rebound to 1.5% from the previous month’s 0.3% decline (revised down from 0.0%).
- Next week brings European Gross Domestic Product (GDP) numbers on Tuesday, with the next high-impact rate call from the US Federal Reserve (Fed) slated for Wednesday.
- Euro area Q4 GDP is expected to print at -0.1%, in line with the previous figure as the pan-European economy lags in stagnation.
- Federal Reserve expected to hold rates steady in January, CME FedWatch Tool suggests markets pivoted to betting on the first rate cut in May after rate bets shifted post-PCE print.
Euro price today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.15% | -0.03% | -0.11% | 0.05% | 0.18% | 0.16% | -0.36% | |
| EUR | 0.16% | 0.13% | 0.05% | 0.20% | 0.35% | 0.33% | -0.21% | |
| GBP | 0.02% | -0.12% | -0.08% | 0.06% | 0.23% | 0.20% | -0.33% | |
| CAD | 0.11% | -0.04% | 0.07% | 0.16% | 0.29% | 0.28% | -0.25% | |
| AUD | -0.03% | -0.19% | -0.06% | -0.14% | 0.15% | 0.13% | -0.41% | |
| JPY | -0.19% | -0.35% | -0.21% | -0.31% | -0.16% | -0.02% | -0.54% | |
| NZD | -0.16% | -0.33% | -0.20% | -0.27% | -0.13% | 0.00% | -0.53% | |
| CHF | 0.34% | 0.19% | 0.31% | 0.23% | 0.37% | 0.52% | 0.51% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Technical Analysis: EUR/USD gets pushed back into technical barriers, but topside limited
EUR/USD hit a multi-week low of 1.0813 early Friday before a rebound into the 200-hour Simple Moving Average (SMA) near 1.0880. Dollar bets continue to weigh on USD pairs, keeping EUR/USD leaning toward a near-term middle around 1.0850.
Despite intraday tests into the low side, EUR/USD is set to continue languishing in an ongoing congestion pattern between the 50-day and 200-day SMAs at 11.0925 and 1.0850, respectively. The pair has been trapped within the consolidation pattern since dropping from December’s peak near 1.1140.
EUR/USD Hourly Chart
EUR/USD Daily Chart
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region.
The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa.
The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro.
QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.