The euro traded around $1.16 in mid-August, a slight dip from the previous month’s highs. Market sentiment is influenced by a complex interplay of economic data, political developments, and monetary policy considerations. Traders are closely watching the upcoming meeting between US and Russian presidents, alongside speculation regarding future moves by both the Federal Reserve and the European Central Bank.
- The euro hovered around $1.16 in mid-August.
- This was slightly below last month’s 2021 highs.
- A meeting between US and Russian Presidents is scheduled, focusing on the Ukraine conflict.
- Ukrainian President Zelenskyy is reportedly not expected to participate.
- Expectations for Fed rate cuts have increased due to weak payrolls and softer ISM Services PMI.
- The ECB ended its easing cycle in July after eight cuts.
- The ECB’s cuts brought borrowing costs to their lowest since November 2022.
- Some market participants anticipate another ECB rate cut before year-end.
- Euro area GDP grew 0.1% in Q2.
- Inflation held steady at 2% in July.
- The EU faces 15% tariffs on most European goods exported to the US.
The asset faces a mixed outlook. While inflation remains stable and the ECB has ended its easing cycle, potential US tariffs and uncertain global political events create downward pressure. The possibility of further ECB action later in the year adds another layer of complexity, making it difficult to predict the asset’s trajectory.