The EUR/USD pair experienced a modest decline on Tuesday, as the financial markets remained relatively quiet due to the US holiday, limiting price movements. The pair displayed a bearish bias and recorded a slight decline, although no significant events or developments occurred to cause any major shifts. However, volatility is expected to increase on Wednesday as Eurozone economic data and the release of the FOMC minutes come into focus. Meanwhile, the Euro lagged behind and weakened against the pound on a day devoid of any noteworthy economic reports.
During the US Independence Day holiday, the US dollar showed mixed performance as market participants remained on the sidelines, resulting in limited trading activity. However, trading is expected to resume normal levels on Wednesday. The key focus will be on the release of the FOMC minutes from the latest meeting, which will provide insights into the Federal Reserve's discussions and future monetary policy decisions. Subsequently, attention will shift towards the US labor market data, including the ADP Employment, Jobless Claims, and JOLTS reports on Thursday, followed by the highly anticipated Nonfarm Payrolls report on Friday. These data points will play a crucial role in shaping expectations regarding the Federal Reserve's next steps.
On Wednesday, the Eurozone will also witness the release of relevant economic data. The May Producer Price Index (PPI) figures are expected, with the annual rate projected to decline from 1% to -1.3%. Such a decline in producer prices would likely be welcomed by the European Central Bank (ECB) as it may provide some relief in terms of inflationary pressures. Additionally, the final reading of the Markit Services PMI is scheduled, although no significant revisions are anticipated.
Overall, the upcoming Eurozone economic data and the release of the FOMC minutes are expected to inject more volatility into the market, potentially shaping the near-term trajectory of the EUR/USD pair.
During the US Independence Day holiday, the US dollar showed mixed performance as market participants remained on the sidelines, resulting in limited trading activity. However, trading is expected to resume normal levels on Wednesday. The key focus will be on the release of the FOMC minutes from the latest meeting, which will provide insights into the Federal Reserve's discussions and future monetary policy decisions. Subsequently, attention will shift towards the US labor market data, including the ADP Employment, Jobless Claims, and JOLTS reports on Thursday, followed by the highly anticipated Nonfarm Payrolls report on Friday. These data points will play a crucial role in shaping expectations regarding the Federal Reserve's next steps.
On Wednesday, the Eurozone will also witness the release of relevant economic data. The May Producer Price Index (PPI) figures are expected, with the annual rate projected to decline from 1% to -1.3%. Such a decline in producer prices would likely be welcomed by the European Central Bank (ECB) as it may provide some relief in terms of inflationary pressures. Additionally, the final reading of the Markit Services PMI is scheduled, although no significant revisions are anticipated.
Overall, the upcoming Eurozone economic data and the release of the FOMC minutes are expected to inject more volatility into the market, potentially shaping the near-term trajectory of the EUR/USD pair.
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