EUR/USD Treading Water as Oil Prices Remain Key Driver
The EUR/USD pair recovered slightly after two days of consolidation following a drop in response to the Federal Reserve's rate hike. However, Germany's regional elections over the weekend created uncertainty and made the country's political picture messier. Despite this, the pair was able to regain some ground due to expectations of another European Central Bank (ECB) rate hike and a decline in oil prices.
This week is expected to be relatively quiet for US macroeconomic data, which means oil prices are likely to have a significant influence on the dollar and EUR/USD. Attention will shift to Donald Trump's meetings with Gulf state representatives and potential developments regarding the Iran conflict and China talks.
The eurozone's manufacturing and services PMI data may attract some attention this week, but it is not as important as oil prices. If the PMI data show signs of stagflation amid an energy spike, it could negatively impact the single currency.