The Euro stabilized in the early session after yesterday’s decline.
Traders could remain cautious ahead of the European Central Bank (ECB) monetary policy meeting on Thursday and the US labor market’s Non-Farm Payroll (NFP) data on Friday.
While anticipations point to a potential interest rate cut in September in the US, the ECB is expected to cut rates on Thursday.
However, some uncertainty remains over the next steps in monetary policy. As a result, the euro could remain exposed to some risks and volatility as traders monitor President Lagarde’s comments for clues on the direction of interest rates. The euro and European treasury yields could be exposed to the downside if the ECB takes a softer stance on its interest rate trajectory.
Furthermore, the upcoming NFP report could further strengthen the greenback, posing downside risks for the Euro-Dollar pair if the added jobs for May come in higher than expected.
