- EUR/USD remains under pressure and falls to a two-week low.
- The dollar remains firm, extending the rally that began after the ECB meeting.
- US inflation data ahead.
EUR/USD remains under pressure and extended the declines that had started on Thursday after the European Central Bank meeting. The pair hit as low as 1.0584, the lowest since May 23, and remains below 1.0600 ahead of key data.
From the ECB to US prices
On Thursday the ECB announced that it plans to raise interest rates in July by 25 basis points and could raise it by 50 basis points in September. Despite this, and the rise in German bond yields, the euro was weakened.
On Friday, ECB official Robert Holzmann said that the neutral interest rate could be around 1.5%, a view shared by Francois Villeroy. Joachim Nagel, the president of the Bundesbank stressed that decisive action is needed to tackle inflation in the region.
The focus of the market is centering on what will be the US inflation data for May to be published at 12:30 GMT. This will be an input for next week’s FOMC decision.
These data can have a wide impact on the market. In the preview, the dollar is rising. The DXY climbs 0.15%, and operates at a maximum since May 19. Treasury bond yields down slightly.
weakness for the euro
EUR/USD is weak and only a return above 1.0630 could alleviate these negative pressures for the euro. Should the declines extend, the next support can be found at 1.0580 and 1.0550 and 1.0530 will follow below.
Technical levels
Source: Fx Street
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