EUR/USD Continues Its Expected Downward Trajectory.
The predominant currency pair displayed a noticeable decline on Thursday. The current exchange rate of EUR/USD stands at 1.0866.
These levels mark a six-week low. The US dollar is experiencing a valid upsurge due to the Federal Reserve's recent meeting minutes, which were released the day before. The minutes revealed the Federal Reserve's acknowledgment of the potential for further rate hikes.
This insight suggests that the Federal Reserve is mentally prepared to persist with its strategy of tightening monetary policy, spurred by the substantial risk of inflationary growth.
As for the stance of the European Central Bank (ECB) regarding rates, market opinions are divided. The most recent reported data indicates a lack of positive momentum in the Eurozone's core prices for July. Isolated economic reports, notably from Germany, indicate subdued prospects. These factors underscore the divergence in opinions: Will the ECB promptly raise rates, or will it abstain from proactive measures? The ECB itself has not provided explicit indications. The next ECB meeting is scheduled for September.
Thus, the focal point of interest rates is once again at the forefront. The US dollar thrives amid such fluctuations and generally benefits from these situations.