EUR/USD: ECB hawks defend Euro above 1.0900 despite Fed rate hike signals, Powell’s Testimony eyed – by anilpanchal7 EURUSD ECB Fed RiskAversion InterestRate
European Central Bank policymaker Boris Vujčić said on Tuesday that they have to consider the risk of doing too much vs too little, adding that a soft landing might not be possible. On the other hand, ECB Governing Council member, Olli Rehn said that the underlying inflation is easing ‘only gradually’. rises by 1.0% for May versus 1.7% YoY expected and 4.1% prior whereas the monthly figures spread disappointment with -1.4% mark compared to -0.7% market forecasts and 0.3% previous readings.
On the other hand, Federal Reserve Governor Lisa Cook said "I am committed to promoting sustained economic growth in a context of low and stable inflation," in her statement to be given before the Senate on Wednesday. Further, Federal Reserve Governor Philip Jefferson said, “I remain focused on returning it to our 2% target.”
That said, US Housing Starts jumped to the highest level since April 2022 by rising 21.7% MoM in May versus -2.9% recorded in April and -0.8% market forecasts. On the same line, Building Permits were also upbeat for the said month, up 5.2% MoM versus -5.0% expected and -1.4% previous readings .versus ECB play and the data counters, the market’s risk-off mood also allowed the US Dollar to remain firmer and weigh on the EUR/USD price.
Amid these plays, the Wall Street benchmark began the week on the negative side while the US Treasury bond yields also snapped a two-day winning streak. Moving on, EUR/USD traders should pay attention to the speeches from second-tier ECB officials ahead of Fed Chair Jerome Powell’s bi-annual Testimony. Should Powell defends the hawkish moves, the Euro pair may witness further downside.
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