Ella 
In the Asian market on Tuesday, it was difficult for the euro/dollar to determine its momentum and fluctuated in a narrow trading range below the 1.0900 integer mark. With the timing of a possible rate cut by the European Central Bank (ECB) still uncertain, investors seem reluctant to make aggressive bets, preferring to wait and see.
The first ECB rate cut is expected in April, while markets are pricing in a total of 135 basis points (bps) of cuts by the end of 2024. That said, European Central Bank President Christine Lagarde said last week that borrowing costs may not start to fall until the summer, and that interest rates would not be cut until new economic data supports the move. . As a result, market focus will remain on this Thursday’s European Central Bank monetary policy meeting, which will play a key role in influencing the euro and provide some significant boost to the EUR/USD pair.
At the same time, the chances of an early interest rate cut by the Federal Reserve (Fed) are getting smaller and smaller, which continues to be a “tailwind” for the US dollar (USD) and a “headwind” for EUR/USD. In fact, as the U.S. economy remains strong and many Federal Reserve policymakers have made hawkish comments recently, investors have scaled back their expectations that the Federal Reserve will launch more aggressive easing policies in 2024. This still supports rising U.S. bond yields, which, coupled with further escalation of geopolitical tensions in the Middle East, supports the safe-haven dollar.
