Euro attracts buying interest

Published on 09.05.2024 12:34

EUR/USD discovers strong buying interest near 1.0730 in Thursday's early New York session. The major currency pair recovers even though speculation that the European Central Bank (ECB) will start lowering its interest rates in June remains firm. A sharp decline in the Eurozone inflation has allowed ECB policymakers to consider that prospect. 

Most ECB policymakers also expect that the rate-cut cycle will continue beyond June as inflation is on course to return to the desired rate of 2%, and the service inflation doesn’t seem stubborn anymore. Services inflation softened to 3.7% in April after remaining steady at 4.0% for five straight months. Traders are pricing in three rate cuts by the ECB this year. 

Contrary to the majority of ECB policymakers, who broadly agree over expectations of reducing interest rates from June, one of its Governing Council members and Governor of Austria's central bank, Robert Holzmann, said in Wednesday's early New York session that he doesn't see a reason to cut key interest rates "too quickly or too strongly," Reuters reported.