EURUSD is under selling pressure as investors focus on the FOMC minutes.

EURUSD is under selling pressure and falls to 1.0820 in Wednesday’s New York session. The major currency pair is trading cautiously ahead of the release of the Federal Open Market Committee (FOMC) minutes later today and the Eurozone/United States preliminary Purchasing Managers Index (PMI) data for May, which will be published on Thursday. The PMI data will indicate developments in demand, inflation, and employment.

ECB policymakers are divided on whether to continue the dovish trend beyond the June meeting.

The Euro remained supported versus the US dollar as market participants It is unclear whether the European Central Bank (ECB) would extend its interest rate cuts beyond June. Few ECB policymakers, including Bundesbank President Joachim Nagel, President of De Nederlandsche Bank Klaas Knot, Belgium Bank Governor Pierre Wunsch, and Bank of Latvia Governor Martins Kazaks, believe that a rate decrease in June is likely, but a follow-up move may be premature.

On the inflation outlook, ECB’s Nagel stated, “There may well be months when inflation picks up a little, as some prices tend to fluctuate – energy prices in particular”. stating, “On the whole, I expect inflation to carry on declining towards our 2% target and to reach it in 2025.”

Daily Market movers: EURUSD falls as US Dollar rises.

EURUSD ticks lower to 1.0840 as uncertainty over when the Federal Reserve (Fed) may decrease interest rates has grown. Fed policymakers advocate retaining interest rates at current levels. Until there is evidence that inflation will return to the desired rate of 2%.
The predicted decrease in the annual United States Consumer Price Index (CPI) figures for April did not give Fed policymakers confidence. That the disinflation process would continue. Given the strength of the US economy, officials are concerned. That the halt in price pressures may not continue long.

Fed officials want to see inflation fall for several months before cutting interest rates.

Loretta Mester, President of the Cleveland Fed, stated on Tuesday. That she needs to see positive inflation statistics for several months before backing a return to policy normalization. When questioned about a specific era. Atlanta Federal Reserve President Raphael Bostic said he does not foresee rate reduction before the fourth quarter of the year. On the inflation prognosis, Bostic stated. That while business owners’ pricing power has decreased, they remain optimistic about the economy’s prospects.
Investors will now focus on the FOMC minutes from the May meeting. Which will be released during Wednesday’s New York session. The FOMC minutes are expected to have little influence. Because the Fed’s interest rate decision was based on stubborn inflation data collected between January and March.