Introduction:
The EUR/USD currency pair is trading near a multi-day top as the dollar falls on weak Treasury bond yields. The forex market has been closely monitoring the inflation data released in the US, which failed to bolster hawkish Fed bets. The euro is also gaining strength due to receding fears of a fallout at SVB and Signature Bank. In this article, we will discuss the factors influencing the forex market and the upcoming events that may provide fresh impulse to the market.
Factors Affecting EUR/USD:
The US inflation data for February 2023, released on March 10, failed to boost the dollar. The data showed that the US Consumer Price Index (CPI) rose by 0.6% in February, slightly below the forecast of 0.7%. The Core CPI, which excludes volatile food and energy prices, rose by 0.4%, also below the forecast of 0.5%. The weaker-than-expected inflation data eased concerns about the Federal Reserve’s hawkish stance, which had been supporting the dollar.
Another factor supporting the euro is the receding fears of a fallout at SVB and Signature Bank. Earlier this month, there were concerns that the collapse of SVB Financial Group and Signature Bank could trigger a broader financial crisis. However, the banks have assured the market that they are financially stable and the concerns have eased.
Upcoming Events:
The forex market is eagerly awaiting the EU Industrial Production data for January 2023, which will be released on March 15. The data is expected to show a modest growth of 0.3%, compared to the previous month’s decline of 1.2%. A positive reading could provide a boost to the euro.
The market is also anticipating the US Retail Sales data for February 2023, which will be released on March 16. The data is expected to show a decline of 0.5%, compared to the previous month’s growth of 0.9%. A weaker-than-expected reading could further weaken the dollar.
Conclusion:
The EUR/USD currency pair is trading near a multi-day top as the dollar falls on weak Treasury bond yields. The disappointing US inflation data has eased concerns about the Federal Reserve’s hawkish stance and is supporting the euro. Receding fears of a fallout at SVB and Signature Bank are also supporting the euro. The EU Industrial Production and US Retail Sales data could provide fresh impulse to the forex market. Traders should closely monitor these events to take advantage of potential trading opportunities.
