EUR/USD adds to the intraday gains by consolidating the biggest daily loss in a week around 1.0500 during early Thursday morning in Europe. The major currency pair’s latest rebound could be linked to the broad US dollar weakness amid cautious optimism in the market, as well as the Euro traders’ hopes of July rate hikes. Though, anxiety ahead of the European Central Bank (ECB) Monetary Policy Meeting Accounts seems to restrict the quote’s upside of late.
That said, the US Dollar Index dropped 0.17% intraday to 113.65 as greenback bulls await fresh clues after being tired of hearing 50 bps rate hike calls from various Fed policymakers, including Chairman Jerome Powell, of late. Philadelphia Federal Reserve Bank President Patrick Harker was the latest one in the line.
Also pressing the US dollar is the recent recovery in the market sentiment, mainly due to improvement in China’s covid conditions and softer US data relating to housing. China reported a drop in the daily covid cases and death tolls to 1,082 and one respectively, vs 1,305 and three in that order on Thursday. On the same line are Shanghai’s plans to unlock the economy in a phased manner after covid-led restrictions.
Looking forward, ECB Meeting Accounts will be closely observed for clear hints over the time and pace of the rate hike as markets cheer the July move, which in turn could propel the EUR/USD prices in case meeting expectations.
In addition, the US Weekly Jobless Claims, Philadelphia Fed Manufacturing Survey for May and Existing Home Sales for April are some other catalysts that need the attention. Most of all, chatters surrounding inflation and growth are crucial to forecasting short-term moves of the key currency pair.
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