- EUR/USD remains on the defensive around 1.0615 in Wednesday’s early Asian session.
- Fed’s Powell said it's appropriate to allow restrictive policy to continue to work, given the strength of the labor market.
- ECB’s Lagarde noted the central bank remains on course to cut rates in the near term, subject to any major shocks.
The EUR/USD pair extends its downside near 1.0620, bouncing off the Year-To-Date (YTD) low of 1.0600 during the early Asian session on Wednesday. However, the hawkish comments from the Federal Reserve (Fed) officials and the safe-haven flows might boost the US Dollar (USD) and cap the upside of EUR/USD in the near term.
On Tuesday, Fed Chairman Jerome Powell said that the US economy's performance has been quite robust. Powell further stated that recent data indicates a lack of significant progress on inflation this year and it will take "longer than expected" to achieve the confidence that inflation will get down to the 2% target. A hawkish tilt by Fed’s Powell provides some support to the Greenback and drags the EUR/USD pair lower.
About the data, Housing Starts in the US fell 14.7% in March to 1.32 million units from the previous reading of a 12.7% increase (revised from 10.7%). The US Building Permits dropped 4.3% from a rising 2.3% (revised from 1.9%) in February. Finally, Industrial Production rose 0.4% MoM in March, compared to the 0.4% increase recorded in February, in line with market expectation.
Across the pond, there is growing speculation that the European Central Bank (ECB) will start lowering interest rates in June due to a weak Eurozone economic outlook and cooling core inflationary pressures. ECB President Christine Lagarde said on Tuesday that the central bank remains on course to cut interest rates in the near term, subject to any major shocks. Lagarde added that the ECB will closely monitor oil prices amid the rising tensions in the Middle East. Later on Wednesday, the Eurozone Harmonized Index of Consumer Prices (HICP) for March will be due. Also, the ECB’s Cipollone, Schnabel and President Lagarde are set to speak.
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
AUD/USD drops to 0.6350 as markets turn cautious on trade uncertainty
AUD/USD is falling back toward 0.6350 in Thursday's Asian trading amid fading optimism over a quick resolution to the US-China trade dispute. Meanwhile, a renewed US Dollar selling on looming trade uncertainty, concerning US, China and Japan could limit the pair's downside.
USD/JPY tumbles toward 142.50 amid US-Japan trade talks
USD/JPY closes in on 142.50, correcting sharply from over a one-week top set on Wednesday. Uncertainty over the US-Japan trade talks and the divergent BoJ-Fed policy expectations continue to offer a double-whammy to the pair amid a fresh bout of US Dollar selling.
Gold price bounces back above $3,350 on fading US-China trade deal optimism
Gold price regains positive traction abpve $3,350 in the Asian session on Thursday, snapping a two-day losing streak to the $3,260 area, or the weekly low touched the previous day. The optimism over a possible US-China trade deal fades quickly and revives demand for the safe-haven bullion.
Ethereum ETF sees boost as bulls target descending channel resistance
Ethereum gained 2% on Wednesday after US spot Ether ETFs recorded their largest inflows since February 4. However, the top altcoin could face a correction after experiencing a rejection at its 50-day Simple Moving Average.
Five fundamentals for the week: Traders confront the trade war, important surveys, key Fed speech Premium
Will the US strike a trade deal with Japan? That would be positive progress. However, recent developments are not that positive, and there's only one certainty: headlines will dominate markets. Fresh US economic data is also of interest.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.