- The Euro explores levels below 1.1600 as the previous recovery attempt failed.
- markets are looking for direction with investors awaiting US CPI data and the Fed decision next week.
- A protracted US shutdown and hopes of Fed monetary easing are keeping US Dollar’s rallies contained.
EUR/USD has retraced previous gains on Wednesday, and remains practically flat on the day, trading right below 1.1600 at the time of writing. The US Dollar (USD) resumed its uptrend in the early European trading session, although the US government closure and market expectations of back-to-back rate cuts by the Federal Reserve (Fed) are keeping US Dollar bulls in check for now.
On Tuesday, US President Donald Trump rebuffed meeting requests by Democratic lawmakers from the previous day, saying that he will not meet them until the government reopens. Meanwhile, the shutdown enters its fourth week as the Senate failed to pass a funding resolution for the 11th time on Monday.
In the absence of key macroeconomic releases in the Eurozone and the US, the speeches of European Central Bank (ECB) policymakers, including President Christine Lagarde and Vice President Luis de Guindos, and Fed officials will be the unique distraction for traders. These speeches, however, are unlikely to provide any new clues on the central banks’ near-term monetary policies.
