ng on Monday. The major currency pair posted the biggest weekly losses since late April by the end of Friday after the US inflation data bolstered expectations of faster/heavier rate hikes by theThat said, the headline US Consumer Price Index rose to 8.6% YoY versus 8.3% expected while the Core CPI jumped 6.0% YoY compared to the expected drop to 5.9% from 6.2% a month earlier. It’s worth noting that the record low of the University of Michigan Consumer Sentiment Index for June, to 50.
Other than the US inflation numbers, covid fears in China and the Sino-American tussles, recently over Taiwan, also weigh on the EUR/USD prices. Beijing witnessed a jump in the covid numbers during the weekend and recalled some of the virus-led activity restrictions together with the mass testing. Shanghai is on the same line. Recently, Beijing’s local government spokesman Xu Heijian mentioned that a covid outbreak linked to a bar in Beijing is ferocious.
At home, multiple European Central Bank policymakers likely Madis Muller, Martins Kazaks and Robert Holzmann tried to elaborate on the regional central bank’s 25 bps July rate hike while suggesting that it’s not a strict limit if the inflation remains firmer. It should be noted that Eurozone inflation refreshed its record top in its latest print.
While portraying the mood, the S&P 500 Futures dropped for the fourth consecutive day to refresh a monthly low to around 3,845, down 1.35% by the press time. In doing so, the benchmark US equity futures stay directed towards the yearly low marked in May. Further, the US 10-year Treasury yields rise 2.7 basis points as buyers attack the four-year low marked in May, around 3.20%.
Looking forward, a light calendar in Europe and the market’s anxiety ahead of Wednesday’s Federal Open Market Committee can keep the EUR/USD prices pressured. However, the CME FedWatch tool shows 26.8% chance of a 75 bp Federal Reserve rate hike at the June 15 meeting, which in turn suggests high hopes, as well as fears of disappointment, suggesting the need for great caution by the pair traders.The oversold RSI conditions challenge the pair’s further declines around a 1.