EUR/USD grinds lower on a firm US dollar, risk-off impulse – by christianborjon EURUSD Majors Fed ECB CentralBanks
Fed officials insist it’s not time to declare “victory” while adding that further rate hikes are coming.The EUR/USD slides for the second consecutive day due to broad US dollar strength, courtesy of a dampened market mood spurred by
officials’ commentary, while US Treasury bond yield rise. At the time of writing, the EUR/USD is trading at 1.0035 below its opening price after hitting a daily high at 1.0095., a gauge of the buck’s value vs. six peers, edges up almost 0.60%, sitting at 108.129, at six-week highs, while the US 10-year T-bond yields are up eight bps, at 2.978%.Fed officials are to blame for recent US dollar strength.
Meanwhile, on the hawkish side, San Francisco’s Fed President Daly said that a 50 or 75 bps would be appropriate in the next meeting while pushing back against rate cuts in 2023. In the meantime, the St. Louis Fed James Bullard said the leans toward a 75 bps increase next month and stressed that it’s too soon to say inflation has peaked.
Minnesota’s Fed Neil Kashkari said that the Fed is committed to getting inflation under control, even though he’s unsure that the Fed can lower inflation without triggering a recession.side, the lack of economic releases on Friday left EUR/USD traders leaning towards ECB’s commentary, led by Schnabel. In an interview with Reuters, she said that “any decision is going to be taken on the basis of incoming data.
Elsewhere, money market futures have fully priced a 50 bps Fed rate hike, while odds of a 75 bps lie at 82%. Across the pond, STIRs markets have been fully priced a 50 bps by the