EURUSD remains under pressure near 1.0730 as political uncertainty in the European Union reduces the Euro’s appeal.

In Tuesday’s late European session, the EURUSD fell near its immediate support of 1.0730. The major currency pair remained on the back foot. With the Euro moving into a bearish trend following French President Emmanuel Macron’s unusual move to dissolve parliament and announce a quick election. Which shook political stability.

Macron’s decision to call a snap election came after exit polls for EU parliamentary elections revealed. That Jordan Bardella won seats.-led-far-right National Rally received 32%-33% of the votes, more than twice as many as Macron’s Centrist alliance.

The European Central Bank refuses to commit to a certain interest rate trend.

The cautious approach of European Central Bank (ECB) officials regarding the interest rate outlook likewise fails to boost the Euro. ECB policymakers are concerned that progress toward. The bank’s inflation target may stop as wage growth appears to be tenacious. In an interview on Monday, ECB President Christine Lagarde stated that last week’s rate cut did not imply a linear decline path. “There might be periods where we hold rates again,” Lagarde told Reuters.

Daily market movers: EURUSD shows weakening, with focus on US CPI and Fed policies.

EURUSD finds a small protection after dropping to roughly 1.0730. As traders focus on the US Consumer Price Index. (CPI) figures for May and the Federal Reserve’s (Fed) monetary policy announcement on Wednesday.
Annual core inflation, excluding volatile food and energy prices, is expected to have slowed to 3.5% from 3.6% in April. During the same period, headline inflation is estimated to have gradually increased by 3.4%. While monthly headline inflation is expected to have increased at a lesser rate of 0.1% from the previous release of 0.3%, the core CPI is expected to have remained stable at 0.3%. The US CPI report will show whether price pressures are on track to return to the target rate of 2%.
Meanwhile, the Fed is widely expected to maintain interest rates in the range of 5.25%-5.50% for the Seventh time in a row. As a result, investors will pay close attention to Fed Chair Jerome Powell’s press conference and the dot plot. Which will show where policymakers see the federal funds rate moving. According to the CME FedWatch tool, 30-day Fed Fund Rate pricing data point to only one rate drop this year. Which might be announced at either the November or December meeting.

The US dollar’s attractiveness remains strong ahead of the Fed’s decision and the US CPI report.

Before discussing rate reduction, Fed policymakers stated that they want to ensure. That the disinflationary process is proceeding steadily. They’ve already cautioned that premature rate cuts could reignite pricing pressures anew. The likelihood that the Fed will keep the existing interest rate framework in place for an extended period of time has increased the attraction of the US dollar. The US Dollar Index (DXY), which tracks the value of the greenback against six major currencies, maintains rises above the critical support level of 105.00.