GBPUSD extended its losses on Tuesday morning in the European market and recorded the third…
EURUSD declines and all eyes are on US inflation data
EURUSD fell at the beginning of trading today, in the European market, and recorded its first daily loss. This comes in light of the US dollar rising and investors’ anticipation of US inflation data, which could be a means of pressure on the Federal Reserve to tighten its monetary policy sooner.
The EURUSD pair traded at $1.2164, down more than 0.2% from today’s opening level of $1.2189.
The single currency achieved an estimated gain of 0.2% against the US dollar at the close of yesterday’s trading, recording the second consecutive daily rise, supported by investors’ desire to buy high-risk assets, which was reflected in the stock markets, which witnessed record heights in the European market.
EURUSD fells before the US inflation data releasing
The US dollar witnessed a rise against a basket of major currencies on Tuesday morning in the European session, recording the first daily rise in three days, and this comes in light of the increasing possibilities that inflation data may increase pressure on the Federal Reserve to tighten its monetary policy sooner than expected.
The dollar index traded at the level of 90,093 points, up by 0.2%, not far from its lowest level in four and a half months, which was recently recorded at 89.533 points.
Despite the current rally in the US dollar, trading is still weak, as there is still more anticipation for more data that will be a strong indicator of the future policies of the Federal Reserve especially after the relatively lackluster jobs report released on Friday.
The US non-farm payrolls report for the month of May revealed that about 559,000 jobs were added after an increase of 278,000 jobs, less than expectations that indicated the addition of about 650,000 jobs.
This data came to ease pressure on the Reserve Bank to reduce its loose monetary policy soon, given the high levels of inflation, US Treasury Secretary Janet Yellen said at the end of last week that higher interest rates and higher inflation levels are also good for the economy.
Markets are awaiting the release of US consumer price inflation data on Thursday, which is likely to change market trends.
Professional Trader and Analyst, economist in Financial and Forex market since 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.