The eurodollar pair fell clearly during trading on Wednesday, giving up its highest level since the beginning of 2024 against the US dollar, as the euro rose clearly during yesterday’s session, benefiting from increasing market bets on the imminent US interest rate cut as well as investors’ optimism about economic growth in the euro area.
In this regard, the Bundesbank predicted in its monthly report issued yesterday, that economic growth in Germany – the largest economy in the euro area – will expand during the third quarter, recovering the economy from the slowdown in activity, and this eventually led to the rise of the euro dollar in trading yesterday.
However, the eurodollar quickly lost some of its past profits in today’s trading as a result of the recovery of the US dollar after Federal Reserve member Michelle Bowman stated that inflation remains high and far from the Fed’s target of 2%, citing bullish inflationary risks and strong employment in the United States
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This means that the US Federal Reserve will take a more cautious approach to the rate cut cycle and the US central bank will likely not rush and cut rates sharply, pushing the dollar higher again.
The performance of the Eurodollar now
On Wednesday’s trading, the EURUSD pair fell nearly 0.09% to $1.1120.
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