Euro-dollar falls to nine-month low as Powell acknowledges progress on lowering inflation

Dollar falls to nine-month low as Powell acknowledges progress on lowering inflation

The dollar extended losses on Wednesday, falling to nine-month lows against a basket of currencies after U.S. Federal Reserve Chairman Jerome Powell spoke of progress in reducing inflationary pressures, but the central bank still warned of further tightening of monetary policy. Powell told a news conference after the Fed announced a 25-basis-point rate hike, as expected, that he wasn't entirely sure it would take a 25-basis-point hike in cooling inflation.

Where to stop raising borrowing costs. He also pointed to progress in dismantling inflation, which he said was in the early stages and said the Fed would continue to make decisions on a meeting-by-meeting basis. Traders of fed funds futures expect the benchmark overnight rate to peak at 4.89% in June before easing back to 4.39% in December. The Federal Reserve's "dot plot" released in December last year showed that policymakers expect the benchmark interest rate to rise above 5%. The dollar fell below the 101 level against a basket of currencies, its weakest since April last year. The euro rose above the 1.10 points against the dollar, the highest since April last year. The ADP national employment report released on Wednesday showed that the U.S. private sector added 106,000 jobs in January, far below expectations, suggesting a cooling in the labor market. The European Central Bank and Bank of England are both expected to raise interest rates by 50 basis points on Thursday, while the main focus of the U.S. economy this week will be the government's January jobs report due on Friday, which is expected to show a rise of 185,000 nonfarm payrolls.

The trend of EUR/USD, the technical chart shows that the RSI and the stochastic index have just dropped from the overbought area, and the exchange rate has failed to break through the 1.10 points. In the short term, the EUR/USD is expected to face an adjustment. The closest support will look at the extension from last year The upward trend line in November is located at the 1.0780 level and overlaps the 25-day moving average. Calculating the golden ratio, the correction range of 23.6% and 38.2% is at 1.0550 and 1.0355, and the adjustment levels extended to 50% and 61.8% will be seen at 1.02 and 1.0040 levels. As for the upward resistance, we continue to focus on the 1.10 points, and the next level at the 1.12 points.

This week's news:
The Eurozone Economic Sentiment Index (ESI) rose to 99.9 in January, the highest since June 2022
The economic sentiment index of the euro zone in January was 99.9
Industrial sentiment index in the euro zone was 1.3 in January
Eurozone consumer confidence index in January was negative 20.9
Eurozone Consumer Inflation Expectations Index at 17.7 in January
Business climate index in the euro zone was 0.69 in January

Germany's seasonally adjusted GDP in the fourth quarter fell by 0.2% from the previous quarter
Germany's total unemployed population was 2.616 million in January without seasonal adjustment
Germany's seasonally adjusted unemployment falls by 15,000 in January
The seasonally adjusted unemployed population in Germany was 2.498 million in January
Germany's seasonally adjusted unemployment rate stands at 5.5% in January

The first estimate of the fourth-quarter GDP of the euro area increased by 0.1% from the previous quarter and 1.9% from the same period last year

Estimated volatility:
Resistance 1.1000* - 1.1200
Support 1.0780 – 1.0550 – 1.0355 – 1.0200






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