EUR/USD Go For 1.0700 as They Eye Fed Minutes, Lagarde
Upcoming Events Create Mixed Reactions
The EUR/USD currency dropped back to 0.700 on Wednesday from the monthly high. On the last negative day of the week, the pair retreated while breaking a two-day follow-up. That said, the pair’s weakness could be associated with the US Dollar’s rebound.
There are mixed anxiety and sentiment in the market ahead of major events in Europe. Thursday promises to be eventful for the European market and economy.
EUR/USD price chart. Source. TradingView
Another factor that weighed on the EUR/USD pair is doubt over economic growth in Europe. This is in spite of the generally hawkish statements from policymakers in the economic zone.
The US Dollar Index, on the other hand, rose to 0.21% on the intraday. The Dollar index also got off a low point of four weeks to regain 102.00. The index’s recovery follows the ten-year bond yields of the US.
The ten-year bond yields of the US rose by 0.8 basis points to 2.767%. The negative risk headline from South Korea and China could have underlined the yields rebound. It could also be the market’s expectation of the Durable Goods Order for last month.
Further Push in the EU for 50 Bps
The Durable Goods Order is expected to come in at 0.6% against 1.1% before. Federal Open Market Committee meeting minutes are yet another factor that could affect growth.
The new house sales have joined reduced preliminary event reports to show some concerns. It is the largest monthly drop in nine years. It is also a contributing factor to the dip of the US Dollar.
The ECB’s President and European Commission VP displayed economic resilience and push the Euro forward. Christine Lagarde and Valdis Dombrovskis’s comments projected the joint currency against the US Dollar.
The Purchasing Managers’ Index for Germany is stronger in the month of May. But the numbers from the Eurozone came in softer than was envisaged. And they could not detail the Euro’s advances.
It is noteworthy that policymakers in the ECB have called for a 50 basis point increase in July. The widespread call has, thus, given significant strength to the Euro.
The EUR/USD pair moves in the near term rely on the divergence between the Fed and ECB. It is going to highlight the FOMC minutes’ publication for Wednesday. It will also highlight the Durable Goods Order from the US.
One should not also forget the GfK sentiment numbers from Germany. The same goes for the statement from President Lagarde and the coming GDP report.