Euro Plummets On Signals Of Early ECB Rate Cut; EURUSD Breaks Below $1.09

Published on Mar 22, 2024 16:17

Euro is plunging near a three-week low against the dollar on Friday tracking massive strength in dollar overseas in addition to comments from ECB officials signaling a faster than expected rate cut. ECB policymaker and Bundesbank Chief Joachim Nagel said on Friday that �the probability of a rate cut before the summer break is increasing.� EURUSD pair plunged sharply to a low of $1.0845 during intraday moves and is currently quoting at $1.0855, down 0.42% on the day. The EURUSD pair limited some losses after data showed upbeat German IFO consumer confidence. The headline German IFO Business Climate Index arrived at 87.8 in March, higher than the February reading of 85.5, much above the market consensus of 86.0. Meanwhile, the Current Economic Assessment Index rose from 86.9 in February to 88.1 in the reported month, beating expectations of 86.8. The IFO Expectations Index � indicating firms� projections for the next six months, edged higher to 87.5 in March vs. 84.1 recorded in the previous month while surpassing the expected 84.7 figure. Meanwhile, bullish momentum in the greenback coming on the back of improving labor market data and after FOMC decision to keep rates unchanged is also weighing down the pair. Moreover, DXY gained strength after Swiss National Bank cut its benchmark interest rate yesterday even as Fed is expected to keep interest rates unchanged for a while. The dollar index that measures the greenback against a basket of currencies was quoting at 104.11, up 0.43% on the day, and at a three-week high. On the NSE, EURINR futures are trading at 90.53, down 0.347% on the day.