The euro edged lower against the US dollar, with EUR/USD slipping toward 1.0300, as investors turned cautious ahead of European Central Bank (ECB) President Christine Lagarde’s speech. Markets remain on edge, looking for clues on the ECB’s next policy move amid concerns over slowing economic growth in the Eurozone.
The US dollar held firm, supported by steady Treasury yields and expectations that the Federal Reserve will maintain a restrictive policy stance for longer. While recent US economic data has shown signs of softening, traders remain wary of ruling out further tightening, keeping the dollar in demand and limiting the euro’s upside.
Meanwhile, the Eurozone’s economic outlook remains fragile, with weak industrial output and sluggish consumer spending raising fears of a prolonged slowdown. The ECB has hinted at the possibility of maintaining restrictive policies, but diverging economic data makes the central bank’s next steps uncertain, adding pressure on the euro.
Lagarde’s speech could provide fresh direction for EUR/USD, particularly if she signals a more dovish policy stance in response to slowing growth. However, any hawkish remarks could help stabilize the euro by reinforcing expectations that rates will stay elevated for an extended period.
Looking ahead, traders will also focus on upcoming US inflation data, which could further influence the Fed’s rate outlook. A stronger-than-expected reading may reinforce dollar strength, while softer data could provide EUR/USD some breathing room.
For now, EUR/USD remains under pressure, with 1.0300 acting as a key support level. Unless Lagarde’s comments shift sentiment, the pair could struggle to mount a meaningful recovery in the near term.
