EURUSD weakened pretty much on Tuesday and remains under bearish pressure on Wednesday.
The major currency remains weak in the middle of the week. The current quote for the instrument is 1.0911.
Demand for the “greenback” skyrocketed after some harsh comments from American monetary policymakers. For example, Lael Brainard, the vice-chair of the Federal Reserve, said that the regulator was going to continue tightening its monetary policy consistently, as well as raise the rates and cut its own portfolio right after the May meeting. According to her comments, the portfolio will be cut much faster than in 2017-2019.
Esther George, President of the Federal Reserve Bank of Kansas City, mentioned that the US was facing the highest inflation in over 40 years and a 50-point rate hike in May might be one of the possible solutions. In her opinion, the current conditions allow to raise the rate above the neutral value to reduce inflation. In this particular case, the neutral value means annual inflation.
Just like Brainard, George is sure that the regulator will cut its portfolio quicker than before.
Judging by these comments, the US regulator is looking very aggressive. They made stock investors in the US sell and raise demand for the USD as a “safe haven” asset.
Later today, market players should pay attention to the FOMC Minutes. The document is rather unlikely to contain something new but as they say, the devil is in the details.
