The EUR/USD pair rose slightly above 1.0960 after some positive comments from ECB officials, despite a more-than-expected slowdown in the German PPI.
Isabel Schnabel, an ECB official, said that the bank is near to deciding on whether to implement rate increases of 25 and 50 basis points at the May meeting, but it is too soon to tell. She contributed that the outlook after May is even more uncertain. Yesterday’s figures revealed that the yearly inflation rate for the region had reduced from 8.5% to 6.9%, which is still triple the European Central Bank’s target rate.
Today, the German PPI fell more than expected in March to 7.5% yearly, from 15.8% in February. That figure was lower than expected at 9.8%. The PPI is often viewed as a leading indicator of the CPI, with falling prices easing the pressure on the ECB.
With inflation in mind, the ECB minutes are closely scrutinized for clues regarding the central bank’s monetary policy intentions. ECB President Christine Lagarde’s speech will be in the spotlight, as will comments on inflation or the political outlook that could affect the euro.
USD is falling, which is helping EUR/USD gain ground. US unemployment claims and Fed speaks will be in focus.
EUR/USD has been up since early March. The price met resistance at 1.1075 in 2023 and moved lower. The price remained above the weekly low, and the 20th SMA and the bullish RSI are giving buyers hope for more gains.
Buyers will look for an increase of more than 1.0984 from yesterday’s high to open the door to a 1.10 psychological level and lead to 1.1075 targets.
USD/CAD fate after US jobless claims data
USD/CAD came ahead of the European open after gains in the previous session and is trading around a weekly high. The USD found support from the Fed’s hawkish rhetoric, while the loonie tracked the decline in oil prices.
New York Federal Reserve Chairman John Williams said inflation has remained too high, fueling intentions of another rate hike in May. This week, belligerent Fed officials hinted that interest rates would rise again in May and remain high throughout the year. However, the market still expects some rate cuts before the end of the year.
Seller may encourage by the RSI below 50. If bears can defend the multi-month uptrend line, test 1.34, the early April low
