Ella 
EUR/USD is bullishly trading above the 1.0800 mark amid a weak USD environment, opening the week on a strong note. The focus this week will be the release of German retail sales for February and U.S. fourth-quarter gross domestic product (GDP) growth data. As of press time, EUR/USD was trading at 1.0816, up 0.08% on the day.
The Federal Open Market Committee (FOMC) held interest rates at 5.25-5.50% for the fifth consecutive meeting last week. Federal Reserve Chairman Jerome Powell said the recent rise in inflation did not change the view that inflation is heading lower, while adding that the central bank would be prepared to cut interest rates if labor market conditions worsen unexpectedly. The Fed kept its dot-plot median outlook for 2024 at 4.625% and said it would cut interest rates three times this year, by 25 basis points each time. Any dovish comments from Fed officials would put pressure on the US dollar (USD) and limit the downside for the EUR/USD pair.
In the euro zone, Edward Scicluna, a member of the European Central Bank (ECB) Governing Council, said the ECB could cut interest rates as soon as April and should not rule out the possibility of a rate cut. Meanwhile, Bundesbank President Joachim Nagel said on Friday that the European Central Bank may cut interest rates before the summer, possibly in June, as inflation returns to its 2% target.
Financial markets expect the European Central Bank to cut interest rates by 89 basis points (bps), or at least three times, but also possible four cuts of 25 basis points, with the first cut in June or July. In addition, rising speculation that the European Central Bank will become the second major central bank to cut interest rates after the Swiss National Bank (SNB) unexpectedly cut rates last week has put pressure on EUR/USD.
Monday will see the release of the Chicago Fed’s national activity index and U.S. new home sales data for February, as well as a speech by Fed official Bostic. German fourth-quarter retail sales and U.S. fourth-quarter gross domestic product annualized numbers will be released on Thursday. The U.S. economy is expected to grow by 3.4%.
