Euro Jiggles. Eyes On US GDP And PCE
London: 21 December 2023 (TraderMade): The Euro is showing its jitters early Thursday, hovering around 1.09811 against the US Dollar (At about 11:43 AM GMT). A cautious mood has overshadowed the common currency, fueled by falling risk appetite and the looming US Personal Consumption Expenditures (PCE) data.
Fed policy in focus
Market participants await the PCE, a key gauge of inflation that influences the Federal Reserve's (Fed) rate decisions. A softer-than-expected reading could bolster hopes for earlier-than-anticipated rate cuts, potentially weakening the US Dollar and boosting the Euro.
Euro caught in a tug-of-war: Hawkish rhetoric vs. sputtering economy
The Euro's fate hangs in the balance caught between the ECB's hawkish pronouncements and the Eurozone's slowing heartbeat. Vice-President De Guindos' tough talk about continued rate hikes sounds good on paper, but reality bites in the form of declining construction output and recessionary whispers from Germany. Despite its earlier gains, economic drag puts pressure on the Euro.
Data whispers: Can the US offer clues?
Today's US economic releases- initial jobless claims and final Q3 GDP figures- could provide a much-needed compass. Will the picture across the Atlantic be sunny or stormy? Robust data could encourage the ECB's hawkish stance, while a weaker economic pulse might force a rethink.
Market jitters: PCE looms large
Despite its temporary rebound, the Euro remains shrouded in a veil of uncertainty. Investors are skittish, with the negative sentiment from European stocks and the looming shadow of Friday's PCE data keeping them on their toes. A soft inflation reading in the US could trigger a wave of dollar weakness, potentially benefiting the Euro.
The Bottom Line
The Euro's journey is far from over. The tug-of-war between the ECB's rhetoric and the economic reality of the Eurozone will continue, with the US data and PCE playing pivotal roles in determining the next leg of the currency's dance. Stay tuned, folks, this Euro tango is just getting started! Stay updated with the EURUSD Live Rates.
