The euro still appreciate.

The European Central Bank (ECB) announced a 0.25% increase in deposit interest rates to 3.25% at its policy meeting on May 4th. This marks the 7th consecutive rate hike since August 2022.

This can be seen as a slowing down in the pace of rate hikes, as the ECB had previously raised rates by either 0.75% or 0.50% in each of its recent meetings. Almost all members of the ECB policy-making committee supported the 0.25% rate hike, with only Ewald Nowotny, the governor of Austria's central bank, dissenting.

The International Monetary Fund (IMF) predicts that inflation in the eurozone will not ease to the ECB's 2% target until 2568.

In other recent economic news, the US Department of Labor revealed that first-time jobless claims rose by 13,000 to 242,000 in the previous week surpassing analysts' expectations of 240,000.

Investors are keeping an eye on the release of non-farm payroll data for April in the United States today, while analysts expect an increase of only 180,000 jobs in April after adding 236,000 jobs in March and an unemployment rate expected to rise to 3.6% in April.

Meanwhile, the ECB has slowed the pace of interest rate hikes, while economic indicators show that the Eurozone economy is growing very slowly and commercial banks are tightening credit. However, the ECB has signaled that it will raise interest rates in the future, while inflation rates in the 20 Eurozone countries remain high.

On Thursday, Christian Lagarde, President of the European Central Bank (ECB), stated at a press conference "It is clear that we have not taken a break from raising interest rates. We know that we have work to do going forward" and added, "Interest rates are still not at a level that limits economic growth" which could result in inflation falling below the target of 2%. Some policy makers suggested after the meeting on Thursday that they expected the ECB to raise interest rates 2-3 more times in the future.

Fredrik Ducrozet, of Pictet Wealth Management stated "We still expect the ECB to raise interest rates by 0.25% in June, which will push deposit rates up to 3.50% and there is a risk that the ECB could raise interest rates by another 0.25% in July, depending on how the banking system in the US develops in the future."

Technical analysis data (5H)

Resistance: 0.9082, 0.9089, 0.9098

Support: 0.9067, 0.9057, 0.9051

Source: Investing.com

 

Pivot Points May 8, 2023 10:44 AM GMT+7