EURUSD is estimating its prospects. Overview for 20.07.2023

The major currency pair is stable on Thursday. The current EURUSD quote is 1.1220.

The market has reached an equilibrium point and is now awaiting news.

The US Federal Reserve and the European Central Bank meetings will take place next week. The market is counting on the fact that the Fed is approaching the point of halting interest rate hikes amid slowing inflation. The probability of a rate increase by 25 basis points is now 99.8 %. However, the possibility of the same increase at the September meeting is only 14.0%, and 26.0% in November. The ECB will continue to raise the rate because its signals regarding the inflationary environment are very dubious.

The final eurozone inflation data for June was released yesterday. The official CPI remained at 5.5% y/y. Nevertheless, core prices saw an increase to 5.5% y/y from 5.4% previously, indicating that inflation continues to remain uncontrolled.

For the euro, the ECB's continued sentiment for a rate hike is a positive signal. For the US dollar, the signs of the tight cycle coming to an end are viewed as an oppressive factor. Fundamentally speaking, the market's most traded currency pair is poised for further growth.