Euro rose in European trade on Friday on track for the first profit in four sessions against the dollar, moving away from two-week lows on short-covering.

Despite the gains, the common currency is heading for the second weekly loss in a row on concerns about a wider US-eurozone interest rate gap.

The European Central Bank is widely expected to cut interest rates in June, while the Federal Reserve is unlikely to change policies this month.

The Price

The EUR/USD price rose 0.25% today to $1.1315, with a session-low at $1.1274.

The price fell 0.4% on Thursday, plumbing two-week lows at $1.1265 following strong US manufacturing data.

Weekly Trades

The euro is down 0.45% so far this week against the dollar, on track for the second weekly loss in a row.

European Rates

Sources reported that some ECB officials see a high chance of a rate cut in June.

President of the Deutsche Bundesbank Joachim Nagel said that German recession this year cant be ruled out.

European Central Bank President Christine Lagarde said the impact of tariffs could be seen on the PMI and unemployment numbers.

Lagarde expects the tariffs to have more of a deflationary role on prices rather than inflationary.

Markets are currently pricing in a 60% chance of an ECB interest rate cut in June.

The US-eurozone interest rate gap expanded to 210 basis points after the European Central Bank cut rates in April, with the gap potentially expanding in upcoming months.

US Rates

According to the Fedwatch tool, the odds of a Fed 0.25% interest rate cut in May stood at 8%.

The odds of such a cut in June stood at 56%, with traders now awaiting the all-important US payrolls data later today to gather more clues.

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