EUR/USD edges higher past 1.0750 as ECB garners more hawkish bets than Fed, German/US inflation eyed – by anilpanchal7 EURUSD Inflation ECB Fed RiskAversion
ls brace for the key day. That said, the major currency pair remains on the front foot at around 1.0760 during the early hours of Tuesday’s Asian session.
That said, the quote began the day on a front foot amid broad US Dollar weakness as markets keep expecting no rate hike from the US Federal Reserve . Challenges to sentiment, however, pared the EUR/USD pair’s daily gains during the US session after a jump in the United States Treasury bond yields joined fears that theeconomy isn’t immune to the slowdown, which in turn could probe the European Central Bank hawks soon, if not now.
As per the latest data from the US Treasury Department, a $240 billion deficit could be found, which in turn pushed the officials to issue more bonds. The same drives down the prices of traditional haven and propel the yields. It’s worth noting that the concerns about the Fed’s no rate hike and previously downbeat US data exert downside pressure on the Treasury bond coupons and the US Dollar.
Elsewhere, a study from the San Francisco Fed concluded that wage growth has a very small impact on inflation, which in turn raises doubts about the central bankers’ emphasis on wage cost numbers as a source of information to gauge inflation pressure. The same could allow the Fed to remain hawkish and offer a hawkish halt.
With that in mind, Former Fed vice chair Richard Clarida came out with comments that it may be more difficult to get inflation near 2% than in the past 15 years. Further, “Expect a hawkish skip this week,” Former President of Bosteon It should be noted that the recently downbeat Eurozone growth data and early signals for inflation haven’t been positive even if most of the
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