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The Euro continued to decline from the opening of morning trading, significantly by European interest rate expectations following increased expectations that the European Central Bank will cut interest rates at its January meeting.
Statements from within the European Central Bank on Wednesday increased the likelihood of further interest rate cuts at the upcoming meeting. European Central Bank Governing Council member José Luis Escrivá said it is “very likely” that the European interest rate will be cut by 25 basis points at next week’s monetary policy meeting.
Euro/Dollar fell to 1.0414 compared to the previous day’s close of 1.0425. The pair reached its highest level during the trading day at 1.0442 against its lowest level of 1.0393.
AI Alliance and Earnings Reports Drive Wall Street Gains
The technology sector led US stocks to record highs on Wednesday after Netflix announced that its earnings exceeded market expectations, in addition to the announcement of companies starting work on a massive alliance to develop artificial intelligence.
The S&P 500 index reached its highest level in six weeks, while the Dow Jones and Nasdaq made their biggest gains in five weeks.
The Dow Jones Industrial Average rose to 44,162 points after adding about 145 points or 0.4%. The S&P 500 also rose to 6,091 points after gaining about 42 points or 0.7%. The Nasdaq Composite added about 2,004 points, marking a record high for the index for the first time since last December.
Netflix shares rose by more than 11.00% after the company announced earnings that exceeded market expectations. Oracle also announced a $100 million initiative to develop artificial intelligence in cooperation with SoftBank Group and OpenAI.
The US dollar continues its upward trend on Thursday, boosted by US data that highlighted a significant decline in the US labor market.
The dollar index, which measures the performance of the US currency against a basket of six major currencies, rose to 108.18 points compared to the previous day’s close of 108.15 points, indicating a narrow trading range for the index.
The index fell to its lowest level on Thursday at 108.13 points against its highest level of 108.52 points. The number of Americans filing for unemployment benefits increased slightly last week, rising by 6,000 to 223,000. While this modest increase doesn’t signal a weakening labor market, it does suggest that some sectors are slowing their hiring pace. Additionally, the number of unemployed individuals has reached its highest level in over three years, indicating a tightening labor market.
Despite these factors, economists expect the Federal Reserve to maintain its current interest rate policy due to continued strong wage growth and persistent inflation.
The Euro is waiting for catalysts and earlier on the day, EUR/USD continued to move up and down in a narrow channel above 1.0400 in the North American session on Thursday. The pair’s technical outlook suggests that the bullish bias remains intact, while lacking momentum.
