EUR/USD prods bears as ECB hawks gain more acceptance than the Fed ones – by anilpanchal7 EURUSD ECB Fed RiskAversion China
EUR/USD picks up bids to pare recent losses amid market’s consolidation after sluggish calendar and US holiday.Challenges to sentiment, Fed comments exert downside pressure on Euro price.EUR/USD pushes back bears at the highest levels in five weeks, snapping a two-day downturn, as it recovers to 1.0925 amid the early hours of Tuesday’s Asian session. In doing so, the Euro pair justifies hawkish signals from the European Central Bank Officials.
On Monday, European Central Bank policymaker Peter Kazimir said, “We need to raise rates again in July.” On the same line, ECB Chief Economist Philip Lane said that another rate hike in July seemed appropriate but noted that the decision in September will depend on incoming data, per Reuters. Furthermore, ECB Governing Council member Isabelle Schnabel also said, “Risks to the inflation
are tilted to the upside.” ECB’s Schnabel also cited the need to keep raising interest rates until seeing a convincing evidence that developments in underlying inflation are consistent with a return of headline inflation to 2%.reports to the US Congress and the latest comments from the Fed officials have been hawkish.
Apart from the ECB-Fed play, the market’s fears of easing economic recovery amid higher rates seem to have exerted downside pressure on the EUR/USD price, especially amid upbeat yields in the Eurozone and the UK, as well as downbeat equities. It should be noted that the rose in the last two days after refreshing the lowest level in a month, retreating to 102.45 at the latest.
Furthermore, the US-China tension about Taiwan escalated and the concerns about China’s inability to propel the growth trajectory also roiled the sentiment and the Juneteenth holiday in the US. It’s worth observing that the US National Association of Home Builders survey jumped to 55.0 in June from 50.0 prior, marking the highest level in 11 months and favored the DXY to grind higher, before the latest retreat.
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