- The rising expectations that the Federal Reserve will deliver bigger rate hikes in the months ahead to tame inflation favors the greenback.
- Talks on fresh Russia sanctions weighs on the Euro.
- ECB’s Schnabel comments that Central bank will hike rates but depending on incoming data.
The US dollar was strengthened at the start of the week due to rising bets on rate hike whereas Europe banning Russian gas amidst worries about economic damage from war in Ukraine weighs on Euro.
Germany said that the West would agree to impose more sanctions on Russia in the coming days after Ukraine accused Russian forces of war crimes. There seems to be momentum for at least discussing an embargo on energy imports, which would likely come with price pain since Russia supplies some 40% of Europe’s gas needs.
German Defence Minister Christine Lambrecht said the European Union should talk about ending Russian gas imports. Meanwhile, Ukraine accused Russian forces of carrying out a “massacre” in the town of Bucha, which was denied by Russia’s defence ministry. Reuters saw corpses strewn across the town.
Talking about Fed, Friday’s strong jobs report for March hitting a two-year low of 3.6% last month supported the view that the Fed will need to aggressively hike rates to stem soaring inflation and a tight labor market.
As per reuters, European Central Bank (ECB) Governing Council member Isabel Schnabel made some comments on monetary policy normalization over the weekend, “We will hike interest rates sometime after, as appropriate, in light of incoming data.” “The speed of normalization … will depend on the economic fallout from the war, the severity of the inflation shock and its persistence.” “Inflation risk was skewed towards even higher readings given sharply rising producer prices, structural economic changes like de-globalization and likely wage hikes.”
EUR/USD 4 Hour Chart:
Latest
Popular
Trending
Archives
Search
Top Tags