EUR/USD is holding ground above 1.0900, as bulls look to a bunch of ECB policymakers and the US data to defend the previous rebound in Tuesday’s Asian session. The pair is on the front foot, as the US Dollar struggles amid a risk-on market mood.
The EUR/USD rose marginally on a quiet Monday across financial markets. The last week of the month will witness key inflation data releases, and market participants will hear from many central bankers. The US dollar weakened moderately on Monday amid a slide in US yields and a rebound in commodity prices.
After PMI data on Friday triggered some pessimism about the health of the economy, data released on Monday showed a decline in the German Ifo. The haedline in June dropped from 91.5 to 88.5, below the market expectation of 90.7, while the Expectation Index tumbled from 88.3 to 83.6, and the Current Assessment fell from 94.8 to 93.7.
The European Central Bank’s forum on central banking in Sintra has started, with many central bank officials from around the world in attendance. ECB President Lagarde will speak several times, as will other ECB policymakers, starting on Tuesday. If the ECB wants to send a message to the market this week, it has an opportunity. The most likely scenario is to stick to the current “data-dependent” mantra, signaling another rate hike in July.
At the Sintra forum, Fed Chair Powell will speak on Wednesday, but surprises are unlikely. Following central bankers’ talks, the focus will turn to inflation data, starting with Eurozone figures and then on Friday in the US with the Core Personal Consumption Expenditures. Those numbers will influence monetary policy expectations.
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