EUR/USD trades near 1.1350, stays silent as US Dollar seeks to recover stability

EUR/USD trades near 1.1350, stays silent as US Dollar seeks to recover stability
  • EUR/USD holds steady as the US Dollar tries to stabilize amid rising stagflation concerns.
  • Fed’s Bostic noted that the US central bank still faces a long path to reach its 2% inflation goal.
  • The ECB is widely anticipated to deliver a 25 basis point interest rate cut on Thursday.

EUR/USD continues to slide for the second consecutive session, trading near 1.1350 during Asian hours on Tuesday. The pair weakens as the US Dollar (USD) attempts to regain stability amid growing concerns over stagflation.

In early hours on Tuesday, Atlanta Fed President Raphael Bostic commented that the Federal Reserve still faces a long journey to bring inflation down to its 2% target. His remarks tempered market expectations for further interest rate cuts in the near term.

In a shift from its earlier outlook, Deutsche Bank now anticipates a 25 basis point rate cut in December—its first forecasted cut for 2025—followed by two additional cuts in the first quarter of 2026. The bank projects a terminal rate between 3.5% and 3.75%.

Market participants are now eyeing the European Central Bank’s (ECB) Bank Lending Survey (BLS), which may offer key insights into the ECB’s assessment of monetary and economic conditions ahead of its policy meeting on Thursday. The European Central Bank (ECB) is set to hold its policy meeting on Thursday, with markets widely anticipating a 25 basis point interest rate cut.

The Euro has also found support amid escalating global trade tensions and uncertainty surrounding US tariff policies, which have reignited fears of a potential recession and undermined investor confidence in US assets.

Investors will closely watch for ECB commentary on the implications of trade tensions for the Eurozone economy and the future trajectory of interest rates.

Euro FAQs

The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day.
EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy.
The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa.
The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control.
Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency.
A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall.
Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

XM Logo
XM


Read review

Forex trading and trading in other leveraged products involves a
significant level of risk and is not suitable for all investors.


Moneta Markets
Moneta Markets


Read review

Risk Warning: CFDs are complex instruments and come with a high risk of
losing money rapidly due to leverage. You should consider whether you understand how CFDs work and
whether you can afford to take the high risk of losing your money. Trading derivatives is risky. It
isn't suitable for everyone; you could lose substantially more than your initial investment.
You don't own or have rights to the underlying assets. Past performance is no indication of
future performance and tax laws are subject to change. The information on this website is general in
nature and doesn't consider your personal objectives, financial circumstances, or needs.


Pepperstone
Pepperstone


Read review

CFDs are complex instruments and come with a high risk of losing
money rapidly due to leverage. 81.4% of retail investor accounts lose money when trading CFDs
with this provider. You should consider whether you understand how CFDs work, and whether you
can afford to take the high risk of losing your money.


XM Logo
XM


Read review

Forex trading and trading in other leveraged products involves a
significant level of risk and is not suitable for all investors.


Moneta Markets
Moneta Markets


Read review

Risk Warning: CFDs are complex instruments and come with a high risk of
losing money rapidly due to leverage. You should consider whether you understand how CFDs work and
whether you can afford to take the high risk of losing your money. Trading derivatives is risky. It
isn't suitable for everyone; you could lose substantially more than your initial investment.
You don't own or have rights to the underlying assets. Past performance is no indication of
future performance and tax laws are subject to change. The information on this website is general in
nature and doesn't consider your personal objectives, financial circumstances, or needs.


Pepperstone
Pepperstone


Read review

CFDs are complex instruments and come with a high risk of losing
money rapidly due to leverage. 81.4% of retail investor accounts lose money when trading CFDs
with this provider. You should consider whether you understand how CFDs work, and whether you
can afford to take the high risk of losing your money.


Editors’ Picks

GBP/USD battles 1.3200 after UK jobs data

GBP/USD battles 1.3200 after UK jobs data

GBP/USD is defending minor bids near the 1.3200 mark in the early European session on Tuesday. The latest data from the UK showed that Unemployment Rate steadied at 4% in the quarter to February while Average Earnings disappointed, weighing negatively on the Pound Sterling. 


GBP/USD News


Is a recession looming?

Is a recession looming?

Wall Street skyrockets after Trump announces tariff delay. But gains remain limited as Trade War with China continues. Recession odds have eased, but investors remain fearful. The worst may not be over, deeper market wounds still possible.


Read more


The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you’re a beginner or an expert, find the right partner to navigate the dynamic Forex market.


Read More


Read More

Leave a Reply

Your email address will not be published. Required fields are marked *