The euro remains near the 1.09 level, aiming to maintain gains from yesterday following Federal Reserve Chair Jerome Powell’s cautious remarks before Congress, which weakened the US dollar. Initial US job data also fell short of expectations, undermining the greenback.

Yesterday’s movement in the exchange rate attempted to break out of recent narrow trading ranges, highlighting the euro’s positive behaviour. However, doubts persist regarding its ability to sustain upward solid momentum amid ongoing concerns about the European economy.

US bond yields declined without apparent cause, possibly due to investor expectations of a more aggressive stance from Powell.

Today’s agenda is highlighted by the European Central Bank (ECB) meeting and President Christine Lagarde’s speech. No changes are expected in monetary policy, shifting focus to Lagarde’s comments on the possibility of a rate cut in June.

Current expectations and ECB officials’ rhetoric support the likelihood of a rate cut, making any deviation from this stance a potential surprise that could impact the exchange rate significantly.

Given the absence of major surprises, the exchange rate will likely remain within a tight range as investors exercise caution ahead of tomorrow’s crucial US jobs report.

The euro could lose recent gains if tomorrow’s jobs data surpasses expectations.

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