EUR is conserving strength. Overview for 23.01.2024

The primary currency pair continues to rise moderately on Tuesday, but overall, investors have adopted a wait-and-see attitude. The current EURUSD exchange rate stands at 1.0895.

There have been few statistics so far, prompting the market to keep a close eye on the euro and speculate about the prospects of the European Central Bank’s future steps. Since the beginning of the year, the EUR exchange rate against the US dollar has dropped by 1.3%.

The main risk for the EUR this week is the ECB meeting on Thursday. Most probably, there will not be any surprises. Recently, monetary policymakers at the European Central Bank presented their average forecasts for the development of the economic and political situation. An evident theme here is the disagreement with prematurely lowering the interest rate.

Market expectations are as follows: investors anticipate an interest rate decrease of 20 basis points by April and 40 basis points by June. Meanwhile, the price environment does not align with the ECB’s goals.

It is essential to bear in mind that the ECB will let the Fed take the lead, allowing the US Central Bank to be the first to ease monetary conditions.