EUR/USD extends its gains for the second session, trading around 1.1190 during the Asian session on Monday.
EUR/USD gains ground due to rising expectations of a Fed rate cut in September. Fed Chair Powell stated at the Jackson Hole Symposium, The time has come for policy to adjust.” ECB official Olli Rehn stated that the recent slowdown in inflation bolsters the case for a rate cut next month. This upside of the EUR/USD pair is attributed to the lower US Dollar following the dovish speech from the US Federal Reserve Chairman Jerome Powell at the Jackson Hole Symposium on Friday.
What is the ECB and how does it impact the Euro? The European Central Bank in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa.
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