The EUR/USD pair is ranging in a range between 1.05-1.04 in the early Tokyo session after a stronger upside move. A mega rate hike statement by the Fed has emphasized the risk-sensitive currencies and has diminished the safe-haven’s appeal. A minor rangebound move is expected to be followed by an upside move, which will drive the asset towards the psychological resistance of 1.0500.
A two-day monetary policy meeting of the Fed policymakers turned out as a nightmare for the US Dollar. Taking into account the price pressures and tight labor market, the Fed has featured a 75 basis point (bps) interest rate hike. Higher-than-expected interest rate hike brought a sell-off in the yields and the US dollar index. Fed chair Jerome Powell in his press conference dictated that the US economy is very strong and well-positioned to handle a tighter policy.
The Fed thinks that higher rate hikes would result in lower employment opportunities and an increase in the jobless rate. Price pressures are soaring sharply and to tame them, the Fed is ready to sacrifice the tight labor market.
Back to the eurozone, investors are focusing on the minutes from the Eurogroup meeting. The major agendas are expected to be gauging new oil suppliers after banning Russian oil imports. Also, escalating price pressures are a major worry for the responsible authorities. Therefore, some measures could be tackled on the same.
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