EURUSD falls below 1.0800 amid a bearish market environment.

EURUSD extends its decline below the important support of 1.0800 in Thursday’s European session. The major currency pair under severe pressure. As the US Dollar (USD) advances amid cautious market sentiment. Furthermore The US Dollar Index (DXY). Which tracks the Greenback’s value against six major currencies, reaches a two-week high slightly above 105.00.

Investors flock to the US dollar as they believe the Federal Reserve (Fed) will not decrease interest rates anytime soon. Fed Policymakers have stated unequivocally. That they want inflation to decline for several months before gaining confidence that price pressures would return to the goal pace of 2%.

The US core PCE price index is expected to have gradually increased in April.

Fed officials believe future rate hikes are unlikely. But have left the prospect open if progress in the disinflation process stalls. For new clues on the interest rate outlook.

Moreover Investors are looking to the United States’ core Personal Consumption Expenditure Price Index (PCE) data for April. Which will be released on Friday and will have a big impact on speculation about Fed rate reduction in September. The annual and monthly core PCE inflation figures are expected to have increased gradually by 2.8% and 0.3%, respectively.

Daily Market movers: EURUSD demonstrates weakness with attention on Eurozone/US inflation data.

EURUSD falls swiftly below the round-level support at 1.0800. Investors expect the Euro’s attractiveness against the US Dollar to erode. Putting pressure on the shared currency pair. The idea is based on the fact that the European Central Bank (ECB) looks prepared to start decreasing interest rates from the June meeting, while the Fed has not committed timing of rate decreases.
Furthermore Noting that the Eurozone’s core inflation has already decreased to 2.7%. And the development in the service disinflation process has resumed after halting in the November-March period. ECB members are comfortable with expectations of the central bank shifting to policy normalization from June.

The European Central Bank is largely expected to lower interest rates at its June policy meeting.

As the June rate drop appears to be a done deal, discussion regarding the ECB’s rate-down trajectory beyond June will forecast the next move in the euro. Financial markets currently expect the  Furthermore ECB to cut rates once more this year. However, a Reuters poll of 82 economists conducted between May 21 and May 28 suggests. That the ECB will slash interest rates twice more this year.
At the start of the year, investors expected the ECB to slash interest rates six times this year. However, expectations for the number of rate reduction fell. As ECB policymakers cautioned that rapid policy easing could reignite pricing pressures. Furthermore, the uncertainty surrounding wage growth momentum has increased the likelihood of a gradual rate cut approach.
Moreover Investors will focus on the preliminary Eurozone inflation statistics for May. Will be released on Friday. The inflation figures will indicate how far and quickly. The ECB will decrease key borrowing rates. Economists predict the annual Harmonized Index of Consumer Prices (HICP) to rise by 2.5%, up from 2.4% in the previous report. The annual core HICP is expected to have increased to 2.8% from 2.7% in April.