EUR/USD is advancing toward 1.0950 in the early European trading hours, looking to gain meaningful traction. The US Dollar is retreating across the board, pausing its three-day recovery mode ahead of mid-tier US data and Fedspeak.
The EUR/USD pair trades in the 1.0910 price zone, posting modest losses in a quiet Monday. Following the central banks’ frenzy from last week, speculative interest became optimistic, as the end of the tightening cycle is close enough to help avoid potential recessions, while inflation keeps easing from record highs achieved mid-2022.
The US Dollar gained amid position adjustments after it sold off last week, although it remains intrinsically weak, given the continued appetite for riskier assets.
On Monday, the Eurozone macroeconomic calendar had little to offer, although European Central Bank (ECB) members hit the wires, maintaining the stakes high for additional rate hikes. Executive Board Member Philip R. Lane said another hike in July seems appropriate, while September’s decision will depend on data. Meanwhile, Isabel Schnabel expressed concerns about the central bank underestimating inflation in the past, noting the interest rate path should have been steeper and suggesting they may continue to hike rates this year.
On Tuesday, the EU will publish the April Current Account and Construction Output, while the United States (US) will release May Building Permits and Housing Starts. It is worth adding that Federal Reserve (Fed) Chairman Jerome Powell will testify before Congress on Wednesday and could provide fresh clues on the future of monetary policy.
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