EUR gains against the USD as Fed signals rate cuts
Daily Currency Update
On Monday, the euro gained ground against the US dollar, with the USD continuing its decline from the previous week. The pressure on the US currency persisted due to signals from the Federal Reserve last week, suggesting the potential for interest rate cuts in the coming year.Anticipation grew last week regarding the likelihood of the Fed reducing its benchmark overnight interest rate by 0.25% at the March meeting. This speculation arose after the US central bank maintained its policy rate within the 5.25%-5.50% range and officials projected a total of 0.75% in cuts for the next year.
Key Movers
Policymakers at the European Central Bank are anticipated to maintain their stance advocating high interest rates until the March meeting, according to seven individuals familiar with the matter who spoke to Reuters. The prospect of a rate cut before June is consequently deemed challenging.Whether the ECB will be compelled to implement interest rate cuts earlier and with greater intensity than originally envisioned remains to be seen.
Expected Ranges
- GBP/USD: 1.2655 - 1.2745 ▲
- GBP/EUR: 1.1565 - 1.1625 ▲
- EUR/USD: 1.0924 - 1.1015 ▲