Ella 
EUR/USD rose, recovering from the previous day’s losses. In the Asian market on Friday, the EUR/USD rose to around 1.0890. However, the euro may face headwinds on speculation that the European Central Bank (ECB) may cut interest rates in September. Market sentiment overall received a boost when European Central Bank President Christine Lagarde said at the World Economic Forum (WEF) in Davos that an interest rate cut might be considered in the summer.
European Central Bank President Christine Lagarde stressed that the European Central Bank’s interest rates may have peaked and emphasized that the central bank’s policy will rely on economic data. European Central Bank President Christine Lagarde admitted that there are ongoing uncertainties and the signals from economic indicators are still weak, indicating that the European Central Bank has a delicate stance on future monetary policy.
The U.S. dollar index remained stable after a short-term rise, showing a positive tendency to continue to rise. Rising U.S. bond yields could provide support for the dollar. As of press time, the two-year U.S. Treasury yields and the 10-year U.S. Treasury yields were 4.36% and 4.16% respectively. On Thursday, heavy U.S. data further pushed the dollar higher, undermining expectations that the U.S. Federal Reserve would cut interest rates early in March.
U.S. existing home sales (monthly rate) exceeded expectations in December, reaching 1.46 million units versus expectations of 1.426 million units. Building permits also rose during the month, climbing to 1.495 million, beating the consensus estimate of 1.48 million. In addition, the number of Americans filing initial claims for unemployment benefits fell to 187,000 in the week ended January 12 from the previous value of 203,000.
