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EUR/USD flat lines below 1.1400 mark ahead of Eurozone/US macro data

  • EUR/USD ticks lower on Wednesday amid a modest USD strength, though it lacks follow-through.
  • Bets for more aggressive policy easing by the Fed cap the USD upside and lend support to the pair.
  • Traders now look forward to key Eurozone/US macro releases for some meaningful opportunities.

The EUR/USD pair recovers a few pips from the vicinity of the mix-1.1300s, or the Asian session low, though it lacks any follow-through amid a modest US Dollar (USD) uptick. Spot prices currently trade around the 1.1375 area and remain confined in a familiar range held over the past week or so.

The USD attracts buyers for the second straight day amid some repositioning trade ahead of this week's key US macro data. The shared currency, on the other hand, is undermined by dovish signals from the European Central Bank (ECB), which turns out to be another factor acting as a headwind for the EUR/USD pair. In fact, traders are pricing in a roughly 75% chance of another rate cut by the ECB in June.

The bets were reaffirmed by ECB policymaker Olli Rehn's remarks on Monday, saying that the underlying inflationary pressures in the Eurozone are easing and that we should not rule out rate cuts below neutral rate. Moreover, ECB Executive Board member Piero Cipollone said on Tuesday that the trade policy uncertainty could reduce euro area business investment and real GDP growth by around 0.2% in 2025-26.

The USD bulls, however, seem reluctant to place aggressive bets amid worries that Trump's erratic trade policies could trigger a sharp economic slowdown. Adding to this, firming expectations that the Federal Reserve (Fed) will resume its rate-cutting cycle soon contributes to capping the USD and acts as a tailwind for the EUR/USD pair, warranting some caution before positioning for any meaningful intraday decline.

Traders now look to the release of the flash German, French, and Italian CPI prints, which, along with the prelim Eurozone GDP report, will influence the shared currency. Meanwhile, the US economic docket features the ADP report on private-sector employment, the Advance Q1 GDP, and the Personal Consumption and Expenditure (PCE) Price Index. This might drive the USD and provide some impetus to the EUR/USD pair.

Economic Indicator

Gross Domestic Product s.a. (QoQ)

The Gross Domestic Product (GDP), released by Eurostat on a quarterly basis, is a measure of the total value of all goods and services produced in the Eurozone during a certain period of time. The GDP and its main aggregates are among the most significant indicators of the state of any economy. The QoQ reading compares economic activity in the reference quarter to the previous quarter. Generally, a rise in this indicator is bullish for the Euro (EUR), while a low reading is seen as bearish.

Read more.

Next release: Wed Apr 30, 2025 09:00 (Prel)

Frequency: Quarterly

Consensus: 0.2%

Previous: 0.2%

Source: Eurostat

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