Anna 
During early European trading hours on Monday, the EUR/USD pair experienced a slight rebound from a five-month low of 1.0622 reached last Friday, hovering around 1.0660. The pair faced downward pressure due to differing monetary policy outlooks between the European Central Bank (ECB) and the Federal Reserve (Fed).
Investor attention is focused on the release of Eurozone Industrial Production data for March, with further anticipation surrounding the upcoming release of US Retail Sales figures later in the day.
The ECB indicated a potential consideration of reducing policy rates in June if underlying inflation continues its anticipated deceleration. In contrast, the Fed is reevaluating its monetary easing strategies amidst persistent US inflation and robust macroeconomic indicators. Recent data showed a year-over-year surge in core producer inflation in the US for March, surpassing expectations.
Traders are adopting a cautious stance amidst heightened geopolitical tensions, potentially seeking refuge in the safe-haven US Dollar (USD) and exerting pressure on the EUR/USD pair. Concerns arise from the possibility of Israel retaliating against Iran’s recent attack, which saw explosive drones and missiles targeting military installations in Israel over the weekend. Most of the incoming projectiles were successfully intercepted by Israel, according to Reuters reports.
Gediminas Šimkus, a member of the ECB Governing Council, highlighted a greater than 50% likelihood of more than three rate cuts occurring this year, with geopolitical events such as the Israel-Iran conflict potentially affecting the timing of the first rate cut.
