Ella 
Possibly due to the ECB interest rate decision, EUR/USD remained near 1.0850 in Asia on Friday after falling the previous day. In addition, better-than-expected U.S. GDP data helped the dollar rise on Thursday, which was negative for the currency pair.
The European Central Bank kept interest rates unchanged for the third consecutive meeting. European Central Bank President Christine Lagarde indicated in her monetary policy statement that an interest rate cut may be possible in the summer. Market participants expect the ECB to cut interest rates for the first time by 50 basis points in June. Interest rate swaps are currently pricing in a cumulative 140 basis points interest rate cut by the European Central Bank by the end of 2024.
The U.S. dollar index may seek to extend its recent gains as U.S. GDP data came in stronger than expected. The country’s fourth-quarter GDP growth was 3.3%, compared with the previous value of 4.9%, which was higher than the market consensus of 2.0%.
U.S. Treasury Secretary Janet Louise Yellen said the strong fourth-quarter gross domestic product (GDP) data was the result of strong and healthy spending and improved productivity. She emphasized that the GDP report did not show the potential threat of a “soft landing” for the US economy. In addition, this Friday’s personal consumption expenditures (PCE) price index data is expected to reveal monthly changes in personal spending and personal income, further affecting market sentiment.
