EUR/USD Holds Firm Above 1.0700 Amid Positive Market Sentiment

EUR/USD rises to 1.0740 even as Germany’s outlook appears bleak

The ECB could then cut rates to boost sluggish demand prospects.

The dollar will be influenced by the US core PCE price index for May

The EUR/USD pair continued to recover to 1.0740 during the European session on Tuesday. Major currency pairs rose as investors’ risk appetite increased amid growing optimism about the Federal Reserve’s (Fed) two rate cuts this year.

The US dollar index (DXY), which tracks the value of the greenback against six major currencies, has fallen to 105.40 as demand for safe-haven assets has eased. The correction came despite the US S&P Global Purchasing Managers’ Index (PMI) preliminary reading for June surprisingly better than consensus and the previous reading.

This week, investors will focus on the US core personal consumption expenditures (PCE) price index for May, which will be released on Friday. The core PCE price index data is the Federal Reserve’s preferred inflation indicator and will provide new clues on when and by how much the central bank will cut interest rates this year.

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