EURUSD rises higher. Overview for 02.05.2024

The primary currency pair is rising on Thursday. The current EURUSD exchange rate stands at 1.0715.

Another meeting of the US Federal Reserve closed neutrally, with the interest rate remaining at 5.5% per annum in line with expectations. This was a regular meeting, presenting neither updated economic forecasts nor rate expectations and held in a clear, schematic, and calm way.

The Federal Reserve continues to reduce its balance sheet without changing the program structure. The US economy is developing at a fast pace. The GDP may increase by 3.3% in Q2. The unemployment rate is estimated to be low, while job gains are expected to be robust. Although year-over-year inflation reduced, it remains high.

Federal Reserve’s long-term plans also remain unchanged, with the inflation target still at the 2% level and maximum employment required.

All comments from Federal Reserve officials were neutral. The derivatives market still expects an interest rate reduction at a September meeting with a 50% likelihood. The forecast chart is significantly worsening. While at least six cuts were anticipated at the beginning of the year, the market currently expects a maximum of one if circumstances allow. This is a good support for the US dollar.