Euro lingers around 1.08

The EUR/USD pair fails to preserve its modest intraday gains back closer to the 1.0800 mark, a fresh weekly top, and trades in neutral territory during the first half of the European session on Thursday. Firming expectations that the European Central Bank (ECB) will cut interest rates at the start of the second quarter overshadow the recent hawkish remarks by Governing Council members and continue to undermine the Euro. This, along with the emergence of some US Dollar (USD) buying, acts as a headwind for the currency pair.

Against the backdrop of the Federal Reserve's (Fed) less dovish outlook on interest rates, a slew of influential FOMC members pushed back against market bets for more aggressive policy easing in 2024. This remains supportive of elevated US Treasury bond yields and assists the USD in stalling this week's retracement slide from its highest level in almost three months. That said, hopes for an imminent shift in the Fed's policy stance, along with the underlying bullish tone around the equity markets, might cap any further gains for the safe-haven buck.

This makes it prudent to wait for some follow-through selling before positioning for the resumption of the EUR/USD pair's recent downward trajectory witnessed over the past month or so. Traders now look to the release of the US Weekly Initial Jobless Claims data, which, along with scheduled speeches by Richmond Fed President Thomas Barkin, might drive the USD. The focus, however, remains on the US consumer inflation figures due next week, which will influence the Fed's future policy decisions and provide some meaningful impetus to the major.