EUR/USD is struck in a tight range slightly below the crucial resistance of 1.0800 in Friday’s European session after a sharp recovery from 1.0725. The major currency pair holds strength as investors have already discounted the fact that the European Central Bank (ECB) will start lowering its borrowing rates in June.
However, ECB policymakers are divided over extending the rate-cut cycle after the June meeting. A few policymakers believe that additional interest rate cuts from the July meeting could revamp price pressures.
ECB policymaker and Bank of Greece Governor Yannis Stournaras said in an interview with a Greek media outlet last week that he sees three rate cuts this year. He sees a rate cut in July as possible and added that an economic rebound in the first quarter made a three-cuts scenario more likely than four. The Eurozone economy expanded by 0.3% in the January-March period, beating expectations of a 0.1% growth.
On the contrary, ECB Governing Council member and Governor of Austria's central bank, Robert Holzmann, said on Wednesday that he doesn't see a reason to cut key interest rates "too quickly or too strongly," Reuters reported.
This week, EUR/USD has been driven by market sentiment due to the absence of tier-1 Eurozone and United States economic data. However, next week, investors will focus on the US Consumer Price Index (CPI) data for April, which will be published on Wednesday.
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