The EUR/USD pair has retraced its recent gains, trading around 1.0870 during the European session on Tuesday. Traders are eyeing the upcoming release of the European Commission’s Consumer Confidence data, which is anticipated to signal an economic downturn with a forecasted reading of -13.2 for July, an improvement from the previous -14.0.
ECB Vice President Comments on Inflation and Decision-Making
In an interview with Europa Press, European Central Bank (ECB) Vice President Luis de Guindos stated that inflation data is nearly in line with projections. He emphasized that September is a more prudent time for decision-making compared to July due to the current high level of uncertainty, underscoring the need for caution.
Federal Reserve and ECB Rate Cut Expectations
Market sentiment is currently focused on the potential for two more rate cuts by the Federal Reserve (Fed), though there are still possibilities of one or even three cuts. For the ECB, there is a strong belief that two additional reductions in key interest rates will occur by the end of the year.
US Dollar Outlook Amid Fed Rate Cut Speculations
The upside for the US Dollar may be constrained as expectations for a Fed rate cut in September grow. Fed Chair Jerome Powell recently expressed optimism about progress on inflation, while Fed Governor Christopher Waller suggested that the time to lower the policy rate is nearing.
Kamala Harris Leads in Democratic Presidential Nomination Race
In US political developments, Vice President Kamala Harris has emerged as the leading candidate for the Democratic presidential nomination. NBC News reports that Harris has secured endorsements from a majority of the Democratic Party’s pledged convention delegates, with estimates showing support from 1,992 delegates, surpassing the threshold of 1,976 needed for the nomination.
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