EUR/USD is set to remain under pressure toward 1.0453 after hawkish Fed minutes, ahead of a big bulk of US data.
Everything is going against EUR/USD – the French government is struggling to pass a budget and may collapse, and the US Dollar is on a roll due to a long list of reasons. Yesterday, tariff talk by President-elect Donald Trump boosted the safe-haven US Dollar, and it was later boosted by hawkish Meeting Minutes by the Fed.
Fed officials talked about only gradually cutting interest rates, seeming ready to pause the cycle entirely. While they do not seem worried about inflation, they might be now – core PCE is set to show that the Fed’s preferred measure of price rises is stuck, not moving any further toward the 2% target. A sub-3% underlying inflation measure is not a disaster, just not an incentive to cut rates. That implies US Dollar strength.
Apart from core PCE, jobless claims, durable goods orders and an updated GDP all come out today – and they will likely show an upbeat picture f
