The EUR/USD pair is trading positively for the second day in a row, reaching 1.0835 in the early Asian session on Thursday. The Federal Reserve left interest rates unchanged on Wednesday, but Chair Jerome Powell hinted at possible cuts in the upcoming September meeting. Additionally, Eurozone inflation has increased to 2.6% YoY in July.
Following the Fed’s decision to keep rates steady, Powell’s comments about a potential rate cut in September have put pressure on the USD and boosted EUR/USD. Meanwhile, Eurozone inflation data exceeding expectations has led to speculation about the European Central Bank’s stance on interest rates in September.
Analysis:
The recent developments in the US and Eurozone economies have significant implications for currency markets. The possibility of a rate cut by the Fed could weaken the USD further, making EUR/USD more attractive for investors. On the other hand, the rise in Eurozone inflation may deter the ECB from cutting rates, supporting the Euro against other currencies. Traders should monitor upcoming economic data releases and central bank announcements to make informed decisions about their investments in the forex market.