Anna 
On Friday, EUR/USD held steady within Thursday’s trading range of 1.0930-1.1000. The euro’s upward potential remains constrained as the European Central Bank (ECB) announces the conclusion of its long-term interest rate tightening policy. Simultaneously, the persistent elevation of U.S. consumer price inflation acts as a deterrent for the dollar’s decline.
Monday witnessed the pair continuing to fluctuate within the previous trading range as the extended U.S. holiday weekend, owing to Martin Luther King Jr. Day, influenced market dynamics.
Despite an unexpected dip in U.S. Producer Price Index (PPI) figures for December, EUR/USD faced challenges in gaining momentum. The annual rate for U.S. PPI fell to 1.0%, below investor expectations of 1.3%, while Core PPI declined to 1.8%, falling short of the anticipated 1.9%.
The increasing bets on a rate cut at the Federal Reserve’s March monetary policy meeting persist, despite policymakers signaling a preference for rate cuts until at least the first half of the year. The Fed, however, emphasizes the need for more evidence to confirm a gradual decline in price pressures toward the 2% target before embarking on a rate-cutting cycle.
In the week ahead, market participants will closely monitor the monthly U.S. retail sales data for December, anticipating a rise in consumer spending from 0.3% to 0.4% compared to November. Additionally, the Federal Reserve’s Beige Book is expected to draw attention, providing insights into the economic landscape.
