Ella 
During early Asian trading on Monday, the EUR/USD fell after retracing the psychological integer mark of 1.0600. Market participants are awaiting Eurozone and U.S. data ahead of Thursday’s European Central Bank (ECB) decision, which is expected to remain on hold. EUR/USD is currently trading around 1.0586, down 0.07% on the day.
The European Central Bank’s interest rate hike cycle is over, but easing will not begin until at least July 2024 as the ECB’s battle against high inflation continues, according to economists polled by Reuters.
On top of that, the EU is considering extending an emergency gas price cap policy in place for the next two months amid concerns that the crisis in the Middle East and damage to the Baltic pipeline could push up gas prices again this winter. Concerns about the euro zone energy crisis could put some selling pressure on the euro and be negative for the EUR/USD pair. Additionally, geopolitical tensions in the Middle East continue to cloud markets. Any signs of escalating tensions in the Middle East could put pressure on riskier currencies such as the euro.
As the Federal Reserve enters a shutdown, Chairman Jerome Powell and many Fed officials have signaled they will keep interest rates steady at their November meeting. Federal Reserve Chairman Jerome Powell said he hopes to pause raising interest rates and monitor the development of economic data in the coming months. Powell further said that if there are more signs that economic growth is above trend or that the labor market stops easing, then tightening more monetary policy may be appropriate.
In addition, Atlanta Federal Reserve (Fed) President Raphael Bostic said on Friday that he does not think the Fed will cut interest rates before the middle of next year. Philadelphia Fed President Patrick Harker reiterated his preference to keep interest rates on hold. Cleveland Fed President Loretta Mester said the U.S. central bank is “at or near the peak of its interest rate hike cycle.”
Market participants will focus on Tuesday’s German and Eurozone HCOB PMI data. On Thursday, the European Central Bank (ECB) will announce its monetary policy decision. Traders will also be keeping a close eye on European Central Bank President Christine Lagarde’s press conference for fresh trading impetus. In the United States, the S&P Global Purchasing Managers Index will be released on Tuesday, the preliminary value of third-quarter GDP growth will be released on Thursday, and the core personal consumption expenditures (PCE) index will be released on Friday. These data will provide direction for EUR/USD.
