EUR/USD pares US inflation-led losses below 1.0000, EU’s energy moves, trade talks eyed – by anilpanchal7 EURUSD Inflation Recession Politics Energy
US inflation renewed hawkish Fed concerns ahead of next week’s FOMC.EU’s von der Leyen to announce energy price cap plans, USTR Tai visits EC VP Dombrovskis.licks US inflation-led wounds around the weekly bottom, picking up bids to 0.9980 during Wednesday’s Asian session. In doing so, the major currency pair consolidates the biggest daily fall in two years ahead of the European Union’s diplomatic moves.
US inflation data renewed fears of the Federal Reserve’s aggressive rate hike, as well as propelled the recession woes, on Tuesday. Also acting as the downside catalysts for the EUR/USD are the geopolitical concerns surrounding China and Russia. That said, US for August rose past 8.1% market forecasts to 8.3% YoY, versus 8.8% prior regains. The monthly figures, however, increased to 0.1%, more than -0.1% expected and 0.0% previous readings.
The inversion between the short-term and the long-term US Treasury bond yields also widened after US inflation data and propelled the recession woes, which in turn drowned the EUR/USD prices due to the pair’s risk-barometer status. That said, the US 10-year Treasury yields rallied to 3.412% and those for 2-year bonds increased to 3.76% following the data, around 3.41% and 3.745% respectively at the latest.
Furthermore, US President Joe Biden’s chip plans to increase hardships for China, as well as the rush toward stronger ties with China to fuel the Sino-American woes. Additionally, expectations that Russia will hit hard after retreating from some parts of Ukraine also weighed on theRecently, US President Joe Biden mentioned, “I'm not concerned about the inflation report released today.
Moving on, European Union Chief Ursula von der Leyen’s plans for the energy price capping and US Trade Representative Katherine Tai’s EU visit to meet European Commission Vice President Valdis Dombrovskis will be important to watch for nearby moves. Also crucial will be the US Producer Price Index before Thursday’s August month US Retail Sales and Friday’s preliminary reading of the Michigan Consumer Sentiment Index for September.
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