Anna 
The EUR/USD pair struggled to build on its modest intraday gains, hovering around the 1.0800 mark, a fresh weekly high. Despite recent hawkish comments from European Central Bank (ECB) officials, growing expectations of an interest rate cut in the second quarter have dampened the Euro’s strength. This, combined with a resurgence of USD dip-buying, created a neutral stance for the currency pair during the early European session.
The USD Index (DXY), which gauges the Greenback against a basket of currencies, paused its retracement from this week’s peak but maintained strength. The Federal Reserve’s less dovish outlook, reinforced by influential FOMC members and robust US economic data, supported the USD. Elevated US Treasury bond yields contributed to renewed USD demand, limiting gains for the EUR/USD pair.
Despite the recent USD strength, the market is still pricing in potential rate cuts, with expectations for five cuts over the remaining FOMC policy meetings this year. This cautious outlook might prevent aggressive USD bets, providing some support to the EUR/USD pair.
Traders are closely monitoring the release of US Weekly Initial Jobless Claims data and speeches by Richmond Fed President Thomas Barkin for potential market-moving cues. The upcoming focus remains on the US consumer inflation figures scheduled for release next week.
