Skip to content EURUSD Fundamental Analysis – 17-September-2024
The Euro has climbed above $1.112 (EUR/USD), mainly because the dollar is weaker. Investors look forward to the Federal Reserve’s important meeting, expecting the first interest rate cut since 2020.
Most people think the Fed will cut rates by 0.25% on Wednesday, but some believe it could be 0.50%.
Central Banks’ Meetings This Week
This week, the Bank of England and Japan will also have meetings. Both are expected to keep their current interest rates unchanged. Last week, the European Central Bank (ECB) lowered its interest rates by 0.25% and suggested more cuts might come. This is due to low inflation and slow economic growth in the eurozone.
Market Expectations for ECB
Markets expect the ECB to cut rates by 0.37% by the end of the year. This likely means another 0.25% cut and a 50% chance of an additional cut.
Meanwhile, wages in the eurozone grew by 4.5% in the second quarter of 2024, which is less than the 5.2% growth in the first quarter.
Conclusion
In summary, the rise of the Euro is due to a weaker dollar and anticipation of rate cuts by the Federal Reserve. Central banks in England and Japan are expected to keep rates steady, while the ECB will likely make further cuts due to economic challenges.
Wage growth in the eurozone is slowing down, reflecting broader economic issues.
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