By Areena FxThe Euro is already dipping below 1.08 following the Federal Reserve’s meeting and Chairman Jerome Powell’s comments.
As anticipated, the Fed maintained unchanged key rates, bringing no surprises. Chairman Powell’s less dovish stance significantly reduced expectations of a rate cut in the March meeting, aligning with previous predictions.
Despite some possibilities remaining, analysts predicting a March rate cut are questioned. For such a swift change in monetary policy, there would need to be significant market shocks, drastic declines in US macroeconomic data, a sharp economic downturn, and a looming recession.
While all scenarios are considered in the markets, a dramatic shift seems unlikely in the next two months, given the current economic landscape.
The US dollar maintains a mild positive momentum. However, as demonstrated yesterday, the Euro continues to react, making it challenging for new low levels to be established.
The agenda remains active, with today’s focus on inflation indicators in the Eurozone and the US manufacturing sector’s performance.
Assuming macroeconomic data favors the US dollar, the mild momentum could persist, with the 1.0720-50 level becoming a potential challenge soon.”