Euro Pressures Against Dollar!
The EUR/USD pair weakened to around 1.1610 during Asian trading (May 22nd), as the strengthening US dollar boosted expectations that the Federal Reserve (Fed) would maintain tight monetary policy. This hawkish sentiment arose amid expectations that US inflation could remain high due to energy disruptions from global conflicts.
The latest economic data showed the Eurozone economy contracted in May at its fastest pace since late 2023, according to the S&P Global Flash PMI. This decline triggered a rise in the cost of living, which depressed demand for services and pushed input inflation to a three-year high. This further weakened the euro against the US dollar.
In the US, employment data showed initial jobless claims fell by 3,000 to 209,000, while continuing claims rose slightly to 1,782,000. These figures confirm the labor market remains strong and support the possibility of a Fed interest rate hike if inflation persists.
Market attention is also focused on the appointment of Kevin Warsh as the new Federal Reserve Chairman, replacing Jerome Powell. This transitional leadership is in focus as it could influence the direction of future monetary policy.
Investors are now watching German economic indicators, including the June GfK consumer confidence survey, first-quarter GDP data, and the IFO business survey, to determine whether Eurozone conditions will continue to pressure the euro or whether there is a chance for a rebound. (asd)
Source: Newsmaker.id
