Selling pressure has heightened in the EUR/USD pair.

The primary currency pair experiences a decline on Friday, with the current EUR/USD quote resting at 1.0842.

In its January meeting, the European Central Bank opted to maintain the existing monetary policy structure, keeping the interest rate steady at 4.5% per annum, a historical high.

The ECB clarified that the rate is defensively positioned, allowing for a deceleration in the pace of inflation growth in the future. Concerning the PEPP refinancing program, the ECB plans to continue its collaboration and fully reinvest the funds obtained from securities. The second-half strategy involves a reduction of the ECB portfolio by 7.5 billion euros, culminating in the complete cessation of the program by the end of 2024.

As per the preliminary estimate, the US GDP for Q4 2023 has surged by 3.3%, surpassing the projected growth rate of 2.0%. This divergence indicates a more robust performance of the US economy compared to its European counterpart, implying that the Federal Reserve could contemplate an interest rate cut.

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