The Euro fell against US dollar and reached its lowest level since June 2020 on Thursday in this week and recovered just modestly ahead of the weekly close. The risk off market mood due to Russia invaded Ukraine, launching a massive military attack made the US dollar to soar. According to US intelligence, the main goal is to depose Ukrainian President Volodymyr Zelenskyy and impose a leader favorable to the Russian regime. Moscow’s military attack took over Chernobyl and reached the capital on Friday when Russia expressed willingness to send a delegation and discuss the possibility of Ukraine becoming neutral. This somewhat helped the Euro to recover on Friday. However, Ukrainian developments are the determinant factors for global markets.
Amidst the geopolitical tension taking the centre stage, market has temporarily taken the attention from the inflation woes. European Central Bank member of the governing council Klass Knot said he expects the ECB to raise rates in the last quarter of this year, adding that he supports winding down the asset purchasing program as quickly as possible. Meanwhile, US Federal Reserve member Raphael Bostic said that he is open to four or more rate hikes this year if inflation persists.
In this week, Eurozone Markit Services PMI on 21st February and US CB Consumer Confidence Index on 22nd February favored uptrend whereas GfK Consumer Climate on 23rd and US GDP quarterly report February favored downtrend for the pair.
The major economic events deciding the movement of the pair in the next week are US ISM Manufacturing PMI at Mar 01, US ADP Nonfarm Employment Change, Fed Chair Powell Testimony at Mar 02, Initial Jobless Claims, ECB Monetary Policy Meeting Accounts, US ISM Non-Manufacturing PMI at Mar 03 and Eurozone Retail Sales monthly report, US Nonfarm Payrolls at Mar 04.
EUR/USD Weekly outlook: