SabahEquityResearch

How Falling US Inflation Could Impact EURUSD

Long
FX:EURUSD   Euro / U.S. Dollar
Falling inflation in the US: Could potentially contribute to an upward trend in the EURUSD exchange rate. This is because lower inflation may signal a less aggressive monetary policy stance from the Federal Reserve (Fed), the central bank of the United States. A less hawkish Fed could reduce the appeal of the US dollar to investors seeking higher returns, making the euro more attractive.

Falling US Treasury yields: Tend to make the dollar less attractive, pushing down the value of the dollar. With regards to the EURUSD exchange rate, lower US interest rates can make the euro more attractive to investors seeking higher yields. This could lead to an increase in demand for the euro, which would push up the value of the EURUSD exchange rate.

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