The reasons for the decline of the dollar and the rise of the euro-dollar pair
The US dollar fell on Thursday for the third consecutive day by a percentage, as it fell on Wednesday from its highest level in a week achieved with the release of US inflation data, and the EUR/USD pair also rose on the back of news that President Trump and Russian President Putin agreed to start talks to end the war in Ukraine.
Yesterday's US inflation data, represented by the US Consumer Price Index for January, accelerated core and core inflation by 0.5% and 0.4%, respectively, while annual inflation and core inflation also unexpectedly accelerated to 3% and 3.3%, respectively, exceeding expectations of 2.9% and 3.1%.
These figures reinforced the Fed's policy opinion that it will maintain its current interest rate policy, as Fed Chairman Jerome Powell indicated to Congress that the central bank is in no hurry to ease policy.
Statements by US Federal Reserve Governor Jerome Powell over two days
As a result, the markets have adjusted expectations, as they now expect only one quarter-point interest rate cut from the Fed this year, which will keep interest rates high for a longer period.
Markets are now ruling out the possibility of a 25 basis point cut in interest rates at the next FOMC meeting on March 18-19.
