- EUR / USD lost its traction after climbing above 1.2200.
- The US dollar index rose to positive above 90.00.
- Focus Shift to ECB Policy Announcements, US Inflation Data
The pair EUR/USD It rose to a fresh weekly high of 1.2219 in the early trading hours of the US session on Wednesday, but reversed its direction. At time of writing, the pair was virtually unchanged on a daily basis at 1.2174.
DXY clears daily losses on the recovery of bond yields
In the absence of significant fundamental drivers, the USD market valuation continues to drive EUR / USD movements. Hours earlier, the sharp drop seen in US Treasury yields weighed on the dollar and caused the US dollar index (DXY) to drop to a daily low of 89.83. With the 10-year benchmark US Treasury yield moving away from the monthly low set at 1,471%, the DXY rallied and remained flat on the day above 90.10.
On Thursday, the European Central Bank (ECB) will announce its political decisions. In anticipation of this event, “the latest announcement by the ECB – that purchases under the Pandemic Emergency Purchase Program (PEPP) during the next quarter will be made at a significantly higher rate than during the first months of this year – reinforces our view that it will remain highly accommodative for longer, “said Lee Sue Ann, an economist at UOB Group.
Meanwhile, Reuters reported on Wednesday that ECB politicians will hold a three-day meeting starting on June 18 in Frankfurt to discuss the strategy review.
On the other hand, market participants will closely follow data from the US Consumer Price Index (CPI) on Thursday.
Technical levels
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