Ella 
EUR/USD continued its fourth consecutive day of gains, trading around 1.0880 during the Asian session on Thursday. A fall in the U.S. dollar (USD) has sent the EUR/USD pair higher, which could be attributed to improving risk appetite.
On Wednesday, U.S. (US) monthly consumer price index (CPI) and retail sales data were lower than expected, supporting the possibility of multiple interest rate cuts by the Federal Reserve (Fed) in 2024. U.S. consumer prices fell to a monthly rate of 0.3% in April, missing expectations of 0.4%. Retail sales were flat, missing expectations for a 0.4% rise.
The U.S. Dollar Index (DXY), which measures the greenback’s performance against six major currencies, is hovering around 104.20. A drop in U.S. Treasury yields weakened the dollar. At press time, the 2-year and 10-year Treasury yields were 4.71% and 4.32, respectively.
In the euro, euro zone first-quarter seasonally adjusted gross domestic product (GDP) rose 0.3% quarter-on-quarter on Wednesday, in line with expectations. The growth marks a recovery from the euro zone’s contraction of 0.1% in each of the previous two quarters. Additionally, annual growth was in line with expectations at 0.4%.
Growing expectations for convergence of monetary policies between the Eurozone and the United States have provided support for the euro. The European Central Bank (ECB) is expected to cut interest rates at its upcoming meeting in June. Meanwhile, expectations are rising that the Federal Reserve will cut interest rates starting in September, especially after core inflation slowed in April for the first time in six months.
