EUR/USD eyes 1.0650 on fresh blood infusion as Fed fades 75 bps odds
04.05.2022, 21:45

EUR/USD eyes 1.0650 on fresh blood infusion as Fed fades 75 bps odds

  • EUR/USD soars above 1.0620 as investors underpinned risk-sensitive currencies on Fed’s policy release.
  • The Fed vapors the odds of 75 bps in the remaining five monetary policies.
  • Euro bulls ignored the underperformance of the Retail Sales.

The EUR/USD pair has witnessed a juggernaut upside move after the Federal Reserve (Fed) feature a rate hike by 50 basis points in the New York session. The shared currency bulls have established the asset above 1.0600 and are driving it higher towards the next barricade at 1.0650.

Well, an interest rate decision of a 50 bps rate hike was highly expected by the market participants therefore, investors have already discounted the announcement however, what made the Fx domain underpin the risk-sensitive currencies is the guidance. Fed chair Jerome Powell announced that a rate hike by 75 bps is not into consideration but investors should brace for more 50 bps interest rate hikes.

The Fed will remain data-dependent now and need evidence of declining price pressures for a moderate stance. The central bank will aim for progress in price stability, which will require a tight monetary policy for a prolonged period. The better fact is, that the US economy can handle the restrictive monetary policy.

Meanwhile, euro bulls ignored the underperformance of Euro Retail Sales, released on Wednesday. The Retail Sales landed at 0.8% lower than the market consensus of 1.4% and the prior print of 5.2%.

Going forward, investors will focus on the US Nonfarm Payrolls (NFP), which will release on Friday. The US NFP is expected to land at 394k against the previous figure of 431k.

 

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