The EUR/USD pair bounced off multi-week lows after Fed Chair Jerome Powell’s testimony on Tuesday. The renewed offer bias in the greenback forced the US Dollar Index (DXY) to give away part of its recent gains. Moreover, the loss of traction in US yields across the curve and dwindling bets of a half percentage point interest rate hike by the Fed at the March 22 meeting also weighed on the USD.
On Friday, the pair pierced the 1.0600 barrier, and the release of the Non-farm Payrolls (NFP) report later in the North American session is expected to be a significant event. The NFP report is a key economic indicator that measures the monthly change in employment in the United States. It is closely monitored by investors and policymakers alike and could have a significant impact on the financial markets.
ECB Officials Set to Speak
Closer to home, ECB officials F. Panetta, E. McCaul, and Chair C. Lagarde are all due to speak. The speeches are expected to shed light on the ECB’s policy stance and its outlook for the Eurozone economy. Investors will be keenly watching for any hints regarding future policy decisions, especially in light of the recent rise in inflation in the Eurozone.
Earlier in the session, final inflation figures in Germany showed the Consumer Price Index (CPI) rising 8.7% in the year to February and 0.8% from a month earlier. The rise in inflation was primarily due to higher energy prices, which are expected to continue to put upward pressure on inflation in the coming months.
Outlook for EUR/USD
Looking ahead, the outlook for the EUR/USD pair will depend on a range of factors, including the NFP report and ECB speeches. A better-than-expected NFP report could strengthen the USD and push the pair lower. Conversely, a weaker-than-expected report could weigh on the greenback and support the pair.
Moreover, any hints of a shift in the ECB’s policy stance could also have a significant impact on the pair. The recent rise in inflation in the Eurozone has led to speculation that the ECB may consider tightening its monetary policy sooner than expected. Any indication of this in the ECB speeches could push the pair higher.
In summary, the EUR/USD pair has rebounded from multi-week lows and is poised to be influenced by key events, including the NFP report and speeches from ECB officials. Investors will be closely watching for any hints of future policy decisions, which could have a significant impact on the pair.