EUR/USD Rate Talking Points
EUR/USD[1] attempts to retrace the decline following the update to the US Consumer Price Index (CPI)[2] as a growing number of Federal Reserve officials warn of a transitory rise in inflation, and the exchange rate may stage another attempt to test the February high (1.2243) as it carves a series of higher highs and lows.
EUR/USD Eyes February High Again as Dovish Fed Rhetoric Persists
EUR[3]/USD[4] appears to have reversed course ahead of the monthly low (1.1986) as comments from Fed Vice Chair Richard Clarida largely mirrors the dovish remarks from Governor Christopher Waller[5], with the recent advance in the exchange rate generating a positive slope in the 50-Day SMA (1.1962) as the moving average snaps back from the 200-Day SMA (1.1953).
Looking ahead, it remains to be seen if the Federal Open Market Committee[6] (FOMC) Minutes will influence EUR/USD as Vice Chair Richard Clarida emphasizes that “there’s still a deep hole in the labor market,” with the permanent voting-member on FOMC going onto say that “it may take more time to reopen a $20 trillion economy than it did to shut it down”while speaking at the Atlanta Fed’s 2021 Financial Markets Conference.
As a result, Clarida pledges to “give advance warning” before scaling back the emergency measures, and it seems as though the majority of the FOMC will continue to strike a dovish tone ahead of the next interest rate decision on June 16 as the vice chair argues that the US economy “has not made substantial further progress” amid the below-forecast print for the April Non-Farm Payrolls (NFP) report[7].
In turn, EUR/USD may stage another attempt to test the February high (1.2243) as the
