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What are the main event for today?

EUROPEAN SESSIONIn the European session, we don’t have much on the agenda other than a few low tier releases that won’t change anything for the ECB or the market. Policymakers are now focused on the euro strength and how that is going to impact inflation going forward. We already had a softer than expected inflation report last month and if that’s going to continue with euro at these levels, the market might start to price in a rate cut before year-end.AMERICAN SESSIONIn the American session, we get a few low tier releases like the US trade balance and US Factory Orders but the focus will be on the US Jobless Claims figures. Initial Claims are expected at 205K vs 200K prior, while Continuing Claims are seen at 1850K vs 1849K prior. We’ve been seeing notable improvements in the US Jobless Claims data that seem to suggest a pickup in labour market activity.Another strong report might trigger a bit of a hawkish repricing as we head into the US NFP report next week. That could support the dollar in the short-term given the recent selloff. CENTRAL BANK SPEAKERS14:30 GMT/09:30 ET – ECB’s Cipollone (neutral – voter)
This article was written by Giuseppe Dellamotta at investinglive.com.

🔗 Source

💡 DMK Insight

The ECB’s focus on euro strength is a critical signal for traders navigating inflation risks. With low-tier releases on the agenda, the market’s attention shifts to how a stronger euro could dampen inflationary pressures. This could influence ECB policy decisions, especially if the euro continues to appreciate. Traders should keep an eye on the EUR/USD pair, as any significant moves could trigger volatility in related markets, particularly commodities priced in euros. If the euro strengthens further, it might lead to a reassessment of inflation forecasts, impacting interest rate expectations. Watch for key technical levels around recent highs, as a break could signal a stronger trend. Conversely, if the euro weakens, it could prompt a shift in ECB rhetoric, leading to potential buying opportunities in euro-denominated assets. Overall, the interplay between euro strength and inflation is something to monitor closely in the coming sessions.

📮 Takeaway

Keep an eye on the EUR/USD pair; a break above recent highs could signal a stronger euro and impact inflation expectations.

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