For four trading sessions in a row, the price of the EUR/USD currency pair is settling around its recent losses extending towards the 1.0470 support level,
Enter your emailIt may remain so until the most important event for this week, which is the interest decisions from the US Federal Reserve, through which it is expected to raise rates. I have often noted in the past that the divergence in economic performance and the future of monetary policy tightening between the eurozone and the United States will ultimately be in favor of the US dollar.
Expectations have grown that the Euro and the Dollar may only reach parity after the exchange rate fell about 2.0% in the week ending April 29th and remains weak at the time of writing on Tuesday May 3rd. This will have a significant impact on the eurozone economy: the consensus and the European Central Bank do not currently expect the bloc to fall into recession, but an intensification of the energy supply shock could lead to such an outcome.
Whether the eurozone slips into recession will affect how the European Central Bank deals with the issue of raising interest rates, which in turn will have implications for the euro exchange rates. The European Central Bank is likely to continue raising interest rates and "normalizing" policy if a recession is averted.
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