EURUSD Falls Below $1.08 – Anticipated Rate Cuts Ahead

EURUSD Analysis – At the end of March, the euro fell below $1.08, marking its lowest point since February 19th and heading towards a nearly 2% drop for the quarter compared to the US dollar. This change came as investors lowered their hopes for significant cuts in interest rates by the Federal Reserve. Their caution was due to solid signs of the US economy’s health and careful comments from the central bank’s officials.

On Wednesday, Fed Governor Christopher Waller stated there’s no rush to cut interest rates, pointing to ongoing high inflation. However, he left the door open for possible rate changes later this year. Over in Europe, Piero Cipollone from the ECB shared that there’s increasing optimism about inflation getting back to the 2% goal by mid-2025. This is partly because wage growth is expected to slow down, supporting the argument for reducing interest rates.

Investors expect the ECB to cut rates in June, but there are mixed views on whether there will be two or three more cuts by the end of the year.

EURUSD Falls Below $1.08, Anticipated Rate Cuts Ahead