USD Index has become muted, EURUSD is preparing to move over 1.0900.
The EURUSD pair is attempting to raise above the round-level resistance of 1.0900 after minutely resetting its day’s high there. The important currency pair has risen quickly after being responsively bought from the pivotal support level of 1.0840. 101.50 resistance is still exerting pressure on the US Dollar Index (DXY), despite its previous capitulation, as the market anticipates a further slowdown in the Federal Reserve’s rate-hike pace (Fed). In the meanwhile, US Treasury bond returns have solidly recovered.
The ECB might raise interest rates by an additional 50 basis points without reaching the terminal rate by the end of the summer.
The likelihood of a severe policy tightening by the European Central Bank (ECB) in the near future is increasing significantly, which has resulted in strong purchasing activity in the euro. The odds of a bigger interest rate hike by the ECB are escalating sharply. ECB policymaker Gediminas Simkus reiterated on Tuesday that the ECB should continue with 50 basis points (bps) rate hikes amid growing wage pressures, as reported by Bloomberg. He has trimmed the expectations of reaching to the terminal rate by the end of summer citing that strong core inflation shows that their battle inflation is still ongoing.
The CIBC Capital Markets experts forecast that the Euro would be stronger in 2023 due to a better macroeconomic environment and continuing ECB policy tightening.
US rates have risen as close to 3.47% as a result of the uncertainty surrounding US GDP statistics.
The yield on the 10-year US Treasury is about At the time of publication, the U.S. GDP was at 3.47%, and it is aiming to increase gains further before the release of the data.S&P500 futures are trying to recover from a sell-off caused by growing unease as volatility is being brought on by earnings season. NYSE technical glitch and missed earnings by tech-giant Microsoft are weighing on the US equities.
