The Struggle of the Pair
The EUR/USD pair is struggling to nurse its wounds in the vicinity of 1.1030 following a refresher of the 22-months low to about 1.1010 it recently went through in the early hours of Friday trading in the European market.
EUR/USD price chart. Source TradingView
In so doing, the leading trading pair declined for a fourth straight day, and it is also bracing for the four-week downtime as the risk-off wave currently favors the dollar and its bullish traders for its safe-haven status.
The bombardment of Europe’s largest nuclear power plant in Zaporizhzhia by Russian troops has provided the most recent blow to the financial market sentiment world over. Even though the fears of nuclear radiation have been toned down and the fire service has taken absolute control of the inferno that ranged at the bombing site, the latest actions from the Russian military undermined the ongoing peace talks between Russia and Ukraine in Belarus, where they came to an agreement on a safe passage for civilians in Kyiv on Wednesday.
On the same wave of news came reports from the United Kingdom that the President of Ukraine, Volodymyr Zelensky, has escaped up to three attempts at assassinating him in a matter of days.
Jerome Powell Testified Further
Moving on, the Federal Reserve Chair, Jerome Powell, restated his commitment for a 25 basis point interest rate increase while, at the same time, showing a willingness to for a 50 basis point interest rate increase if the occasion calls for in in the Federal Reserve’s meeting scheduled for later this month. He stated this in the second session of his testimony before the US Congress.
The CME’s FedWatch Tool, while analyzing the possible market impact of Powell’s statement, stated that about 89% odds are in favor of the 50 basis point rate increase in the Federal Reserve’s meeting scheduled for next month.
There was no support for the upbeat comments of Powell from current US data, but they highlight Friday’s released Job data for the month of February. That said, the US Service Purchasing Managers’ Index slowed down for the third straight month in its recent publication, but the second-class job data came in positive as well as the Factory Orders.
In Europe, the European Central Bank’s monetary policy meeting minutes mentioned that the major risk at hand was no longer about the monetary policy tightening too early but fears of effecting it too late.