- EUR/USD is aiming to violate 1.0440 as investors see eurozone PMI stable.
- The DXY is displaying a subdued performance as the focus has shifted to the Fed minutes.
- The ECB may announce its first interest rate hike after a span of 11 years.
The EUR/USD pair is juggling in a narrow range of 1.0423-1.0438 in the Asian session after rebounding from the critical support of 1.0420. On a broader note, the shared currency bulls have defended the significant support of 1.0380 and have recovered firmly as investors are betting over a rate hike by the European Central Bank (ECB).
The FX domain is waiting for the rate hike announcement from the ECB as it will be the first rate hike by the central bank in the past 11 years. Taking into consideration the plain-vanilla Harmonized Index of Consumer Prices (HICP), which has climbed to 8.6%, a rate hike looks invincible. The households in Europe are facing real income shocks as soaring oil and food prices have reduced their paychecks. However, the continuation of an accommodative monetary policy may elevate the price rise further.
In today’s session, investors will keep an eye on the eurozone PMI data. The S&P Global Composite and Services PMI are expected to remain stable at 51.9 and 52.8 respectively.
Meanwhile, the US dollar index (DXY) is facing barricades around 105.20 as the asset is expected to remain volatile ahead of the release of the Federal Open Market Committee (FOMC) minutes, which are due on Wednesday. The release of the Fed minutes will unfold the ideology behind announcing the 75 basis points (bps) interest rate hike by the Federal Reserve (Fed) in its June monetary policy.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds near 1.0500 ahead of Powell speech
EUR/USD holds steady at around 1.0500 in the American session on Wednesday. The weaker-than-expected ADP Employment Change and the ISM Services PMI data hurt the USD and help the pair keep its footing. Fed Chairman Powell will speak later in the day.
GBP/USD recovers toward 1.2700 after US data
Following a pullback, GBP/USD edges higher toward 1.2700 in the second half of the day on Wednesday as the US Dollar loses strength following the disappointing data releases. Markets eagerly await Fed Chairman Jerome Powell's speech.
Gold advances to $2,650 area as US yields edge lower
Following a consolidation phase near $2,640, Gold gains traction and rises to the $2,650 area. The benchmark 10-year US Treasury bond yield pushes lower after weak macroeconomic data releases from the US, helping XAU/USD stretch higher.
UnitedHealth unit CEO murdered early Wednesday in Manhattan Premium
UnitedHealthcare CEO Brian Thompson was gunned down in Manhattan Wednesday morning. Thompson was shot by a masked gunman as he was in the city for an investor meeting.
Four out of G10
In most cases, the G10 central bank stories for December are starting to converge on a single outcome. Here is the state of play: Fed: My interpretation of Waller’s speech this week is that his prior probability for a December cut was around 75% before the data.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.