The euro took a beating yesterday after the ECB policy decision, in which the central bank more or less said that they are done with rate hikes. Lower economic projections also don't breathe much confidence into their supposed narrative of higher for longer and it will now come down to future data points to really support or derail that notion.
In any case, currency traders were not convinced and EUR/USD fell to test the May low of 1.0635 before keeping just above that now.
So far today, the antipodeans are the decent movers with both AUD/USD and NZD/USD up by 0.4% to 0.6465 and 0.5930 respectively currently. The moves are helped by a stronger Chinese yuan as Beijing continues to shore up their defense of the local currency and also helped out by some positive data here.
Looking to the session ahead, we will have the final readings for August CPI for France and Italy but all of which doesn't tell us anything we don't already know. The main story for the euro right now is that the ECB has signaled a peak in interest rates and it now comes down to whether they can keep rates higher for a sufficient period of time or if we are due for rate cuts some time next year. ESTR pricing is roughly seeing the first rate cut in June 2024.
0645 GMT - France August final CPI figures
0800 GMT - Italy August final CPI figures
0900 GMT - Eurozone July trade balance data
That's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.
