The primary currency pair appears neutral on Monday. The current EURUSD exchange rate stands at 1.0963.
Previously released US statistics on the consumer price index alter the perspective on the US Federal Reserve’s future actions. Inflation in the country has accelerated to 3.4% y/y from the previous 3.1%. Core inflation has not provided significant signals. It can be said that inflation is decreasing unevenly, posing a challenge for the Federal Reserve.
The US regulator was expected to start easing monetary policy as early as March 2024. The interest rate ranges from 5.25%-5.50% per annum, with a supposed reduction of 25 basis points. Overall, the capital market anticipates witnessing six interest rate cuts over the year.
The question is whether the Fed will perceive the situation as suitable for rate cuts. The Federal Reserve needs a decisive victory over prices. As this has not been achieved yet, the pause may persist.
In the US, Martin Luther King Jr. Day is celebrated on Monday, leading to minimal market activity.