Euro holds ground after yesterday's rise

The Euro continues to hold its ground against the US dollar as we get ready to enter today’s European trading session after a disappointing round of consumer sales figures from the US led to speculation that a rate cut may be on the cards from the US Federal Reserve.

US Retail Sales declined by 0.8% Month-over-Month in January. The market was expecting a decline of 0.1% against the previous increase of 0.4%. While Retail Sales Control Group decreased by 0.4% in January, swinging from the previous increase of 0.6%.

However, there was a little bit of good news as the US Initial Jobless Claims reported 212,000 unemployment claims for the week ending on February 9, against the market expectation of remaining consistent at 220,000.

From the Eurozone we saw GDP data for the fourth quarter which remained unchanged but despite this, the ECB's forward-looking wage tracker indicates robust wage pressures.

Christine Lagarde, President of the European Central Bank (ECB), commented that recent data indicates continued subdued economic activity in the near term. Lagarde emphasized the significance of instilling confidence to achieve the ECB's 2% inflation target while acknowledging the persistent disinflationary trend.

Looking further ahead today, the main drivers of the EUR/USD currency pair will be the release of key business data such as the US Core Producer Price Index (PPI) which is forecast to hit the market at 1.6% down from 1.8% for the year ended in January.

The Michigan Consumer Sentiment Index, which is a key indicator of consumer spending is expected to come in at 80 which is a slight improvement on last months figure of 79