VOT Research Desk
The EUR/USD is up half a percent as buyers approach the 1.0400 level ahead of Tuesday’s European session.
As a result, the major currency pair records its first daily rise in three months, ahead of the important German inflation indicator, the Harmonized Index of Consumer Prices (HICP) for November, as well as the US Confederation Board’s (CB) Consumer Confidence for the same month.
On the other hand, European Central Bank (ECB) President Christine Lagarde stated on Monday that the economy is expected to contract for the remainder of the year and into 2023.
Lagarde also stated that interest rates will continue to be the ECB’s primary instrument for combating inflation.
In a similar vein, ECB policymaker and Slovak central bank President Peter Kazimir stated that the risk of inflation Eurozone’s recession is worsening.
According to ECB Governing Council member Klaas Knot, recession is not a certain outcome.” Furthermore, ECB policymaker Pablo Hernandez de Cos stated that the (rate) hikes thus far are insufficient to return inflation to target.
Federal Reserve (Fed) personnel were also busy, attempting to predict the US central bank’s next steps while also examining EUR/USD movements. The EUR/USD pair’s recovery remains elusive unless it crosses a three-week-old prior support line, which is currently around 1.0410.
