Ella 
In early European trading on Tuesday, the euro fell slightly against the dollar to around 1.0950. Improving risk sentiment has provided some support to the US dollar and capped the pair’s upside. Traders will take further cues from euro zone retail sales data, which is expected to slow to 0.1% in June.
Selling spread across financial markets on Monday as investors worried about a U.S. recession. Nomura economist Andrzej Szczepaniak said: “The market panicked after the release of the U.S. jobs report on Friday. Traders currently believe that the probability of emergency easing by the U.S. Federal Reserve (Fed) is about 60%.
On Monday, Chicago Federal Reserve President Austan Goolsbee said the Fed would respond if economic or financial conditions deteriorate. Any comments from Fed officials about an early interest rate cut could weaken the dollar in the short term.
On the bright side, data released by the Institute for Supply Management (ISM) on Monday showed that the U.S. ISM Services Purchasing Managers Index (PMI) in July was stronger than expected, rising to 51.4 from 48.8 in June.
In addition to the possibility of an emergency interest rate cut by the Federal Reserve. Investors expect the European Central Bank (ECB) to cut interest rates by 0.5 percentage point at its next meeting in September. Eurozone retail sales on Tuesday may provide some hints about the economic conditions in the bloc and the path for the European Central Bank to cut interest rates. EUR/USD could rise if the reading is stronger than expected.
