EURUSD fluctuates around 1.0850, with the focus on FOMC minutes and preliminary Eurozone and US PMI data.
In Tuesday’s European session, EURUSD remains in a tight range near 1.0850. The major currency pair is projected to remain sideways as the US Dollar (USD) stabilizes ahead of the Federal Open Market Committee (FOMC) Minutes. And preliminary S&P Global Purchasing Managers Index (PMI) data for May. Which are due out later this week.
The euro is reasonably strong against the US dollar (USD). As concerns about the European Central Bank (ECB) prolonging the rate-cut cycle beyond June grow. ECB officials are satisfied with the central bank’s decision to decrease its three key interest rates following the June meeting. But they are hesitant to commit to any further rate path and prefer to remain data-dependent.
Some ECB members warned that a follow-up rate decrease at the July meeting may reignite pricing pressures. And negate the impact of the work done to alleviate sticky price pressures.
Daily Market Movers: EURUSD is calm ahead of Eurozone and US PMIs, consolidating in a tight range near 1.0850.
Investors await fresh cues on interest rate outlooks on both sides. The Atlantic. In the United States, Federal Reserve (Fed) officials continue to emphasize the importance of maintaining the restrictive policy framework. Because they are skeptical that price pressures will return to the intended rate of 2% on a sustainable basis.
US inflation fell in April, as expected. However, Fed policymakers want to see more positive inflation statistics to be certain. That price rise is on track to return to the 2% target. As a result, Fed policymakers reiterate that present monetary policy is sound and should be maintained.
Fed officials think they need more soft inflation data to be certain that inflation will return to 2%.
On Monday, Fed Vice Chair for Supervision Michael Barr stated that “Q1 inflation was disappointing. And did not provide the confidence needed to ease monetary policy”. Barr promised to provide more time for According to Reuters, it must maintain a strict policy stance in order to do its duties. Separately, Atlanta Fed Bank President Raphael Bostic told Bloomberg TV. That officials would need more time to be convinced that inflation will fall to 2%.
Meanwhile, investors are focused on the FOMC minutes for the May policy meeting, which will be released on Wednesday. Officials’ views on the interest rate forecast at the May meeting are expected to be hawkish, since higher-than-expected inflation in the January-March quarter suggested that the disinflation process had halted.
On the economic front, investors await the preliminary Eurozone and US PMI figures for May, which will be released on Thursday. The PMI data will be used to assess each country’s economic outlook.
