Euro to USD today is reported to be slightly up around 1.0970 levels on Wednesday morning in Europe after posting its first daily gain in the last three days. The latest rise in the currency pair can be attributed to the broad US dollar weakness ahead of the key US inflation data for April, as well as cautiously optimistic sentiment in the market despite mixed feelings about US default concerns and banking crisis. In addition, hawkish comments from ECB officials could influence the quotes and support bullish sentiment towards the currency pair, compared to comments from Federal Reserve (Fed) members. On Tuesday, Peter Kazimir of the European Central Bank (ECB) said, "Based on current data, the ECB will have to continue raising interest rates for longer than expected." This statement was followed by a warning from ECB policymaker Martins Kazaks that the rate hikes may not be completed in July. This suggests that the ECB may continue its tight monetary policy for a longer period. Meanwhile, John Williams, President of the New York Federal Reserve told Reuters, “The Fed has not said that interest rate increases are done.” Elsewhere, US Senate Majority Leader Chuck Schumer announced that no progress was made in key debt ceiling negotiations during the first round of talks at the White House. However, US President Joe Biden called the meeting “productive” and reported that House Speaker Kevin McCarthy said that the US would not default on its debt during the meeting, according to Reuters. The news also quoted US House Speaker McCarthy as saying that both sides have agreed to have their staffs meet this week, and party leaders will meet again on Friday to continue key debt ceiling talks. In this situation, traders are still hoping that the US can avoid a default. However, global ratings giant Moody’s recently said, “What once seemed impossible is now a real threat.” On the other hand, Pierre-Olivier Gourinchas, the IMF’s Chief Economist, expressed concerns about banks on Tuesday. This comes after the Fed’s quarterly survey of bank loan officers, released on Monday, showed a negative impact of higher interest rates on credit conditions. Meanwhile, the recent disappointing US NFIB Small Business Optimism index and German Industrial Production figures failed to provide any positive sentiment to EUR/USD traders amid the mixed environment. Amid the volatile market conditions, the S&P 500 Futures managed to post gains while the US 10-year and 2-year Treasury yields witnessed their first daily losses in the last five days by around 3.50% and 4.02%, respectively. On the other hand, the US Dollar Index (DXY) also weakened to 101.50 after rising for two consecutive days. Later in the day, the final reading of the German Harmonized Index of Consumer Prices (HICP) for April is expected to confirm the estimate of 7.6% YoY, which could provide some encouragement to EUR/USD traders ahead of the all-important US Consumer Price Index (CPI) data for the month. If the upcoming US CPI data shows higher inflation, then traders who are more hawkish on the Fed may start betting on a stronger US dollar. This could reverse the intraday downtrend and result in a pullback in EUR/USD. In technical analysis, the EUR/USD pair is currently between three peaks around 1.0940 and the 21-day Moving Average line near 1.1000. However, buyers seem to have run out of steam lately.

 

Also Read : Euro Today's Value Increases Buying Offers Around 1.1000s

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This analysis is based on fundamental and technical views from trusted sources, not advice or invitation. Always remember that this content is intended to enrich the reader's information. Always use independent research first regarding other forex information to be used as a reference in your trading.

 

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