EUR Euro ─ The euro stands firm at the 1.10 mark

The Federal Reserve announced a 50 basis point interest rate cut on Wednesday, starting a policy easing cycle. It is expected that the Federal Reserve will steadily ease monetary policy during this cycle. The first rate cut was larger than usual and aimed at boosting a cooling job market while continuing to push inflation down. Fed Chairman Powell said at a press conference after the decision to lower the overnight interest rate target range to 4.75%-5.00%, "This decision reflects their growing confidence that as long as our policy stance is properly calibrated, we can achieve a dovish pace." Maintaining labor market strength while growth and inflation continue to decline toward 2%. Powell said that the risks facing the two tasks are currently "roughly balanced" and that this interest rate cut marks a "strong start" to protect the economy and labor market. Fed Governor Bowman opposed the decision, saying she was in favor of a 25 basis point rate cut, and should be seen as a commitment by the Fed not to fall behind. Policymakers expect the Fed's benchmark interest rate to fall by another 50 basis points before the end of the year. The interest rate will be cut by 100 basis points in 2025 and 50 basis points in 2026. The target interest rate range will eventually drop to 2.75%-3.00%.

As for the trend of the euro against the U.S. dollar, the exchange rate clearly held the 1.10 mark on Wednesday and Thursday last week. It is expected that the euro against the U.S. dollar will stabilize again in the short term. The major supports are expected to be 1.0950 and 1.0880, and the next level will be 1.0780. The resistance is expected to be at the 1.1160 level, with the key being 1.12. In late August, the exchange rate fell back after encountering resistance at 1.12; then the resistance refers to the high of 1.1275 and the 1.15 mark in July last year.

Estimated volatility:
Resistance 1.1160 - 1.1200* – 1.1275 - 1.1500
Supports 1.1000* - 1.0950 -1.0880 - 1.0780

news briefly
September 16
ECB Governing Council member Kazimir: The ECB will almost certainly have to wait until December to cut interest rates again; it will not cut interest rates in October unless there is a major change in the outlook
ECB Chief Economist Lane: Gradual interest rate cuts should continue

Eurozone trade surplus not seasonally adjusted in July was 21.2 billion euros
Eurozone labor costs increased 4.7% in the second quarter compared with the same period last year
Eurozone wages rose 4.5% in the second quarter compared with the same period last year

September 18
The Eurozone Harmonized Index of Consumer Prices (HICP) rose 0.1% in August from the previous month.
The Eurozone Harmonized Index of Consumer Prices (HICP) rose 2.2% in August from a year earlier.
 

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