Skip to content EURUSD Fundamental Analysis – 13-June-2024
EUR/USD—The Euro has recently surged beyond $1.08, gaining strength from a weaker dollar following lower-than-expected inflation figures in the United States. This shift comes as the Federal Reserve maintained its current interest rates, indicating only one rate cut this year and four for the next, fewer than the market anticipated in 2024.
Macron Calms Markets with Election Stand
Earlier this week, the Euro was recovering from five-week lows, driven by easing political concerns in France. President Emmanuel Macron dispelled rumors about his potential resignation if his party does not fare well in the upcoming legislative elections.
Macron’s decision to call for a snap election was a reaction to the far-right’s victory in the European Parliament elections, which has sparked worries among investors regarding France’s economic and fiscal policies.
ECB Makes First Rate Cut in Five Years
On the other side of the Atlantic, the European Central Bank (ECB) executed its first interest rate cut in five years last week, yet signaled a careful stance on future reductions. This move by the ECB underscores a cautious approach to monetary easing, aiming to balance economic support while avoiding unnecessary risks.
Summary
Investors should monitor these developments closely as they navigate the current economic landscape. Understanding the interplay between US inflation data, Federal Reserve policies, and European political dynamics is crucial for making informed decisions in this volatile environment.
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