EURUSD remains close to parity but keeps trying to recover.
The major currency pair perseveres in its attempts to rise after yesterday’s decline. The current quote for the instrument is 1.0039.
The key highlight is the parity EURUSD reached yesterday, something that investors haven’t seen in 20 years and, probably, wouldn’t like to see. However, it should come as no surprise. The difference between benchmark interest rates of the ECB and the US FOMC is playing against the European currency. In addition, the Euro Area is facing a trade balance deficit due to the energy price surge and problems with supplies – all this also put pressure on the EUR.
Europe’s energy crisis is bad news for the EUR. Everything that is happening right now can’t be solved quickly, which means that the Euro will remain strategically weak despite all its attempts to recover.
Later today, market players should switch their attention to the US CPI, which is expected to show 1.1% m/m and 8.8% y/y. Inflation in the US may show a new high, increasing the chances for a 75-point rate hike in July.
High inflation won’t shock investors – they’ve already got used to it. The Core CPI might drop, but not too much.
