The EUR/USD pair trades on a weaker note around 1.0890 during the early Asian trading hours on Tuesday.
EUR/USD weakens near 1.0890 in Tuesday’s Asian session. Fed’s Powell said the central bank will not wait until inflation hits the 2% target to cut interest rates. The ECB is expected to hold the key interest rate unchanged at its July meeting on Thursday. The renewed US Dollar demand weighs on the major pair. Traders will keep an eye on US Retail Sales for June and the speech from the Federal Reserve’s Adriana Kugler on Tuesday.
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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