EUR/USD fluctuates around 1.0800.

Earlier on Wednesday, the EUR/USD rose to the area of 1.0870. Despite increased US yields, the currency is still broadly purchased. Hawkish ECB language keeps the pair in the black. In spite of the greenback’s robust note on Wednesday, the EUR/USD currency pair maintains daily advances in the vicinity of 1.0850.

In line with the steady rise in the dollar, EUR/USD trades in the well-known range, slightly higher in the mid-1.0800s. Comments from the ECB’s rate setters appear to support the stronger tone in the euro. Indeed, although leaving the door open to further rate hikes, albeit at a slower rate, ECB Board member Kazimir emphasized that the core inflation might play a significant influence in interest rate decisions.

Member Lane also justified further rate increases and predicted that regional inflation may sharply decline by year’s end. In the euro calendar, GfK’s measure of consumer confidence in Germany increased somewhat for the month of April to -29.5 (from -30.6), while the measure in France declined to 81 in March (from 82). The weekly recovery in the EUR/USD crosses initial resistance near 1.0870 as some USD purchasing has resumed.

In the interim, despite temporarily declining recession risks, price movement in relation to the euro should continue to closely track dollar dynamics as well as the ECB’s likely next steps in an environment where high inflation is still the dominant factor.