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Old 22-08-2023, 11:03
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Default EUR/USD Bullish Above 1.0900 Amid Slight USD Weakness

The EUR/USD pair continues to gain strength, surpassing the 1.0900 mark in the Asian session for the second consecutive day. This upward momentum comes after the pair rebounded from its recent low of 1.0845, indicating a positive trend.

One of the factors supporting this optimistic outlook is the statement from Philip Lane, the Chief Economist of the European Central Bank (ECB). Lane predicts steady growth for the Euro Zone economy without a severe recession. This, coupled with the narrowing of the German yield curve, suggests that the ECB may consider tightening its policies, which in turn bolsters the Euro. Furthermore, the modest weakness of the US Dollar adds further support to the EUR/USD pair.

Traders are keeping a close eye on the Federal Reserve’s actions, anticipating that they will halt their rate-hiking cycle in September, leading to a decline in the USD Index. However, the US economy has shown resilience, leaving room for a potential rate hike later in the year.

The expectation of higher interest rates is keeping US Treasury bond yields relatively high. Additionally, investors are exercising caution in light of key speeches by the Federal Reserve Chair and the ECB President at the Jackson Hole Symposium. This caution may limit aggressive bets on the EUR/USD pair.

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