Ella 
In early Asian trading on Friday, EUR/USD rose to a multi-week high near 1.0900. The European Central Bank (ECB) decided to keep monetary policy unchanged on Thursday as it continued to try to bring inflation back to its target range. Focus will turn to Friday’s U.S. non-farm payrolls (NFP) data. EUR/USD is currently trading around 1.0947, up 0.01% on the day.
On Thursday, the ECB kept its main refinancing operations, marginal lending facility and deposit facility rates unchanged at 4.5%, 4.75% and 4.0% respectively. The ECB stated that it will maintain appropriately restrictive policies as long as necessary to bring inflation down to the ECB’s target. However, if inflation signals continue to improve, a rate cut could be initiated at the June meeting.
In the United States, Federal Reserve Chairman Jerome Powell said on Thursday that an interest rate cut may not be too far away if inflation signals are in line. However, Powell stressed that the timing and size of rate cuts will depend on the data. Investors expect the start of rate cuts in June, followed by four cuts totaling a full percentage point by the end of 2024.
Focus turns to Friday’s U.S. labor market report for February, which includes U.S. nonfarm payrolls, the unemployment rate and average hourly earnings. February labor market data will be a key factor in the Fed’s assessment of the current and future trajectory of inflation. On the euro front, revised Eurozone GDP will be released later in the day. These events will provide direction for the EUR/USD currency pair.
