EUR/USD Maintains Its Position above 1.0650 Despite Renewed Selling Pressure
The EUR/USD pairs modestly gains near 1.0672 on Thursday due to the weakening USD. Powell, of the Federal Reserve, stated that it could take the central bank longer than anticipated to reach the 2% target. An ECB policymaker stated that a rate reduction at its June meeting is becoming increasingly probable.

The EUR/USD pair gains a point to 1.0672 in the early Asian trading session on Thursday. A risk-tolerant environment and renewed selling pressure in the US Dollar (USD) support the recovery of that major pair. Later on Thursday, investors will monitor the customary weekly Initial Jobless Claims, the Philadelphia Fed Manufacturing Index, the CB Leading Index, and Existing Home Sales.
The Federal Reserve's (Fed) expectations for a reduction in interest rates had diminished. Tuesday's remarks by Fed Chairman Jerome Powell indicated that recent data have not bolstered the central bank's confidence and that achieving the 2% target is likely to require more time than anticipated. Powell's hawkish remarks regarding the Federal Reserve could provide some support for the US dollar and limit the EUR/USD's near-term advance. The CME FedWatch Tool ranks the probability that the Federal Reserve will reduce interest rates in September as nigh as 71% as perceived by investors.
Conversely, investors augment their wagers on the occurrence of an interest rate reduction by the European Central Bank (ECB) in June. On Wednesday, ECB policymaker Joachim Nagel stated that a June rate cut appears more probable, despite the fact that specific components of the incoming inflation data continue to appear higher than desired. Meanwhile, ECB policymaker Bostjan Vasle predicted that if disinflation persists as anticipated, the deposit rate will fall to 3% by the end of the year from its current record high of 4%. Differentials in interest rates have been the principal catalyst for the major pair. The dovish posture adopted by the ECB exerts downward pressure on the Euro (EUR) and presents a headwind for the EUR/USD pair.
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