The EUR/USD currency pair shows signs of recovery as it pulls away from recent multi-week lows near 1.0850. This positive movement is attributed to a corrective decline in the US dollar, prompting traders to cash out some of their recent gains.
The current market sentiment favors risk-taking, providing much-needed support to the pair at the beginning of the week. Simultaneously, the German 10-year Bund yields continue their recovery, further bolstering the upward momentum after Friday’s gains around the 2.30% mark.
The European Commission (EC) has released updated forecasts, indicating that unemployment is expected to remain stable at 6.8% this year, gradually declining to 6.7% by 2024. The EC has also revised its projections for inflation and economic growth, anticipating a 5.8% rise in consumer prices for 2023 and a 2.8% increase in the following year. Economic expansion is predicted at 1.1% in 2023 and 1.6% in 2024.
Moving forward, the broader euro area awaits the release of the Industrial Production data, while across the pond, the NY Empire State Manufacturing Index and TIC Flows are expected. Additionally, several speeches by Fed officials, including Bostic, Kashkari, Barkin, and Cook, will shed further light on the economic landscape.
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