Preliminary HICP rates to move the euro
The EUR/USD pair remained strong as the US dollar weakened despite market expectations of continued higher interest rates by the Fed. The Federal Open Market Committee (FOMC) Minutes revealed that policymakers are concerned about early interest rate cuts, indicating that policy easing will not start any time soon.
The Eurozone and German Purchasing Managers Index (PMI) data came in mixed for February. The preliminary Eurozone and German Services PMIs came in better than expected but Manufacturing PMIs were weaker than market forecasts.
The FOMC Meeting Minutes for January highlighted the importance of further evidence of disinflation to alleviate concerns of inflation rising again, especially after the release of hot figures from the Consumer Price Index (CPI) and Producer Price Index (PPI) from January, and strong employment data from February.
Expected Volatility – Medium
Wednesday’s revised USD GDP rate for Q4 and retail sales will move the dollar.