EUR/USD drops following ECB members’ dovish remarks

The euro’ rebound is unable to rise over 1.0647, down -0.24%, as ECB policymakers hint at a rate cut in June. Strong employment numbers in the US and some hawkish remarks made by Fed’s Williams have given the USD a new lease on life. The EUR/USD exchange rate is still unstable and perilously near the mid-term low of 1.0600.

The Euro’s rally has stalled just below the 1.0700 zone, and on Thursday the pair dropped, reaching intraday lows of 1.0645. The common currency has been negatively impacted by the dovish remarks made by ECB policymakers and the solid US data that supports the Fed’s “higher for longer” stance.

Vice President of the European Central Bank Francoise Villeroy confirmed earlier today that rate cuts will occur in June, unless there is a significant surprise. Robert Holzmann, a hawk and governor of the Austrian central bank, has echoed these remarks.

Regarding US data, macroeconomic data that supported the notion of a robust economy with a tight labour market has validated the country’s good economic outlook. While a manufacturing activity gauge has hit its highest mark in two years, jobless claims are still very low.

Beyond that, US yields and the US dollar have risen from intraday lows as a result of New York Fed President John Williams’ reaffirmation that there is no pressing need to cut interest rates. The pair is not able to move far away from the five-month lows, indicating that the near-term bias is still neutral. The first resistance level is 1.0700, and it is followed by 1.0730 and 1.0755. The levels of support are 1.0553 and 1.0605.