Ella 
In early Asian trading on Monday, EUR/USD rose slightly to below the 1.0900 mark. The European Central Bank’s (ECB) January monetary policy meeting on Thursday will be an event that traders will watch closely. As of press time, EUR/USD was trading at 1.0897, up 0.03% on the day.
Confidence that the Federal Reserve (Fed) will cut interest rates in March has waned after last week’s U.S. economic data, including retail sales and consumer confidence indexes, showed improvement in the U.S. economy. The odds of a rate cut at the Fed’s March meeting fell to 49.3% from 81% a week ago, according to the CME FedWatch tool.
On the other hand, ECB Governing Council members are wary of easing financial policy too early. The ECB is not expected to change policy at its January policy meeting on Thursday. However, traders will get more clues from European Central Bank President Christine Lagarde’s speech after the meeting, focusing on whether ECB President Christine Lagarde confirms that she will cut interest rates for the first time this year. Investors believe the European Central Bank will begin cutting interest rates in the spring, as the implementation of tighter real policy rates will push inflation towards its 2% target on a sustained basis.
The European Central Bank’s monetary policy decision will be announced on Thursday, and no change in policy is expected. In addition, Thursday will also release the initial value of the annual rate of U.S. fourth-quarter gross domestic product. On Friday, the U.S. Commerce Department will release the December PCE price index (PCE), which is the Fed’s most important inflation indicator.
