EUR/USD finds cushion around 1.0600 after a nosedive move post-hawkish Fed minutes

• EUR/USD has sensed a loss in the bearish momentum around 1.0600, more downside looks favored.
• Risky assets have been heavily dumped as a few Fed policymakers favored a 50 bps interest rate hike in the February meeting.
• ECB Lagarde has confirmed the continuation of the 50 bps rate hike spell for March.

The EUR/USD pair has gauged a cushion around 1.0600 in the early Asian session. Despite the hawkish commentary in the Federal Open Market Committee (FOMC) minutes, the major currency pair has sensed a loss in the downside momentum. Risk-perceived assets have been heavily dumped as a few Federal Reserve (Fed) policymakers favored a 50 basis point (bps) interest rate hike in February monetary policy meeting to tame stubborn inflation.

It seems that Fed policymakers are not gay with the easing United States Consumer Price Index (CPI) in the last three months and need to see more progress. Fed policymakers have reiterated that higher rates are required for a sufficient period of time to achieve the 2% inflation target. Fed chair Jerome Powell and his teammates are worried that the inflationary pressures are still prone to upside risks due to China's economic reopening and Russia's war with Ukraine.

Fed minutes conveying that higher interest rates will sustain longer have infused fresh blood into the US Dollar Index (DXY). The USD Index is looking for sustainability above 104.00 amid the risk-off mood. S&P500 futures witnessed marginal losses on Wednesday, portraying a risk aversion theme. The demand for US government bonds has marginally improved despite hawkish Fed minutes. The return delivered on the 10-year US Treasury yields has trimmed to 3.92%.

On the Eurozone front, European Central Bank (ECB) President Christine Lagarde clearly announced “Headline inflation has begun to slow down but reiterated that they intend to raise the key rates by 50 basis points (bps) at the upcoming policy meeting. She also cited that the central bank is not seeing a wage-price spiral in the Eurozone.