A soft-landing seemingly within grasp for the US economy
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The EUR/USD pair continues in its upwards path for the 7th consecutive day and has hit its highest level since February 2022. The fibre’s rally is the result of a divergence in the monetary policy paths of the ECB and the FED. While the latter is expected to hike rates only one more time, the former is expected to continue its tightening strategy as most countries in the Eurozone are still witnessing strong inflationary pressure. Today, the economic calendar features German Buba monthly report. Investors will also remain attentive to ECB president Lagarde’s remarks at an ECB conference in Frankfurt. The fibre was trading at 1.1226 at the time of writing.
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The G20 meeting?in India will continue over the next 2 days where finance ministers of 20 major global economies will discuss debt structuring of poorer countries under the Common Framework in order to help those countries with their debt repayments. Yesterday, US Treasury Secretary Janet Yellen said that she was ready to work with China on areas of mutual interest. Last week data showed that inflation is easing faster than expected and investors are anticipating that the Fed will cut rates sooner rather than later. Consumer morale is sky high as shown by the University of Michigan’s consumer sentiment index coming out at 72.6 points, surpassing expectations of 64.4 points. Meanwhile equity markets are rallying as analysts begin to perceive the possibility of a soft-landing with greater clarity.?Data due today include the NY Empire state manufacturing index and the 3 and 6-month bill auction. The US dollar continues to trade lower against its major peers with the US dollar index trading at 99.95.