EUR/USD Dips Below 1.1400 Amid Strong US Data, Weak French Inflation
The EUR/USD pair dipped below 1.1400 for the second straight day, boosted by the recovery of the US Dollar (USD) following an upbeat Consumer Confidence report. Additionally, weak inflation data in France weakened the common currency, which was trading on Tuesday at 1.1335, down more than 0.40%.
Risk appetite improved as market participants digested news that US President Donald Trump said trade talks between the United States (US) and the European Union (EU) were gaining strength following his threat of 50% tariffs last Friday. Although he backed off, leaving some room for negotiations, it remains to be seen whether the two sides reach a deal before July 9.
Upbeat US Consumer Confidence data in May, as released by the Conference Board (CB), provided a boost to the EUR/USD pair. The US Dollar Index (DXY), which tracks the American currency against a basket of six other currencies, rose more than 0.62% to 99.54.
Other data in the US showed that Durable Goods Orders plunged in April, hitting their lowest level since October 2020.
Across the pond, French inflation figures continued to show improvement in the deflation process, opening the door for further easing by the European Central Bank (ECB).
The ECB’s Gediminas Simkus said he sees room for “a rate cut in June.” However, some voices at the ECB have turned a little more hawkish, with Robert Holzmann, a member of the Austrian Central Bank and an ECB member, stating in an interview with the Financial Times (FT) that he sees no reason to cut rates at the June and July policy meetings.
Data from across the bloc revealed that the EU’s Economic Sentiment Indicator improved for the first time in three months in May, in line with Germany’s GfK Consumer Sentiment for June.(alg)
Source: Fxstreet
