EUR/USD Maintains Its Position Below 1.0600 Prior To The ECB's Rate Decision

During the early Asian session on Monday, the EUR/USD pair turns red subsequent to a retracement from the psychological round mark of 1.0600. Market participants are awaiting Eurozone and US data prior to Thursday's European Central Bank (ECB) meeting, at which no rate change is anticipated. Presently, the primary pair is trading near 1.0586, a decrease of 0.07% on the day.

Economists surveyed by Reuters believe the ECB has completed its cycle of rate hikes; however, the commencement of reducing measures is not anticipated until July 2024 at the latest, as the struggle against high inflation continues.

In addition, the European Union is contemplating the extension of a February-implemented emergency petrol price limit in response to concerns that the crisis in the Middle East and the sabotage of a Baltic pipeline could cause prices to rise once more this winter. Concern over the potential energy crisis in the Eurozone may cause the Euro to experience some selling pressure and act as a headwind for the EUR/USD pair. Moreover, ongoing geopolitical tensions in the Middle East maintain an ominous presence in the market. A signal of heightened tensions could cause a depreciation of a more volatile currency such as the Euro.

Numerous Fed officials, including Federal Reserve (Fed) Chair Jerome Powell, have indicated that interest rates will remain unchanged at the November FOMC meeting as the organisation enters its blackout period. In the future months, Fed Chair Jerome Powell has expressed a desire to observe the development of economic data before pausing further rate hikes. Powell added that additional monetary policy tightening could be warranted if additional indicators of above-trend growth materialise or if the labour market ceases to ease.

Moreover, Raphael Bostic, president of the Atlanta Federal Reserve (Fed), stated on Friday that he does not anticipate a rate reduction by the United States central bank before the middle of the following year. President of the Federal Reserve Bank of Philadelphia Patrick Harker reaffirmed his inclination to maintain current interest rates. The Federal Reserve Bank of Cleveland, according to Fed President Loretta Mester, is "at or near the peak of the rate hike cycle."

On Tuesday, market participants will closely observe the HCOB PMI data for Germany and the Eurozone. The monetary policy decision of the European Central Bank (ECB) is scheduled to be announced on Thursday. Traders will also closely monitor the press conference of ECB President Christine Lagarde in search of renewed inspiration. The US S&P Global PMI is scheduled for release on Tuesday, followed by the initial estimate of Gross Domestic Product (GDP) growth for the third quarter on Thursday and the Core Personal Consumption Expenditures (PCE) on Friday. These figures may provide the EUR/USD pair with a distinct direction.