The EUR/USD pair maintains its consolidation stance in the tranquility of this Monday.
The primary currency pair remains neutral in today's subdued market. The current exchange rate for EUR/USD is recorded at 1.0963.
Recent US statistics on the consumer price index have introduced a shift in the perspective regarding the future actions of the US Federal Reserve. The country's inflation has accelerated to 3.4% year-on-year, up from the previous 3.1%. Core inflation, however, has not provided clear signals, indicating an uneven decrease in inflation that poses a challenge for the Federal Reserve.
Anticipated to commence monetary policy easing as early as March 2024, the US regulator contemplates an interest rate reduction ranging from 5.25% to 5.50% per annum, with an expected 25 basis points reduction. The capital market foresees six interest rate cuts throughout the year.
The pivotal question revolves around whether the Federal Reserve deems the current situation conducive to implementing rate cuts. The central bank awaits a decisive victory over inflation, and as this achievement has not been realized yet, a pause in rate adjustments may persist.
In the United States, the celebration of Martin Luther King Jr. Day on Monday contributes to minimal market activity.