The EUR/USD pair remains on the defensive around 1.0935 during the early European session on Friday.
EUR/USD trades with mild losses near 1.0935 in Friday’s early European session. Awarmer US inflation reading supports Fed hawks' call for gradual interest rate cuts. The ECB is expected to deliver a cut to the 3.5% deposit rate next week. The hotter-than-expected US inflation reading on Thursday has provided some support to the Greenback and caps the upside for the pair.
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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