EUR/USD continues its upward trend, benefiting from robust data that works against the USD.
The major currency pair sustains its upward momentum on Wednesday, with the current EUR/USD quote at 1.0950.
Christine Lagarde, President of the European Central Bank (ECB), stated recently that the ECB is unlikely to declare the achievement of peak interest rates or the end of the rate hike cycle in the near future. This sends another clear signal to the foreign exchange market that the ECB will persist in its commitment to tightening monetary policy.
The ECB is set to raise interest rates for the ninth consecutive time at its July meeting, with the primary objective of combating inflation.
Meanwhile, the US released a substantial volume of macroeconomic statistics, which proved highly interesting. Notably, new home sales in May rose to 763,000 houses, surpassing April’s figure of 680,000 houses. The year-on-year comparison also revealed a significant increase. Intriguingly, mortgage rates in the US reached 6.79% per annum in May, a remarkably high level for the country. This rise can be attributed to uncertainties related to the limits of the US national debt and mixed sentiments in the financial sector. Consequently, the number of mortgage applications decreased, and house prices declined from $487,300 to $416,300 within a month.
Consumers are spending in anticipation of further price increases. While this currently provides robust support to the economy, these statistics may serve as a basis for a new round of interest rate hikes by the Federal Reserve.
Although the US dollar should theoretically be in demand due to expectations of additional interest rate hikes, the euro appears stronger due to a higher level of certainty surrounding its trajectory.
The post EUR Maintains its Strength. Overview for June 28, 2023 appeared first at R Blog – RoboForex.