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EUR/USD rebounds after hitting weekly low, ahead of Fed, ECB policy decisions
The EUR/USD pair rebounds after hitting a weekly low of 1.0942 on Tuesday, as traders brace for the Federal Reserve and the European Central Bank (ECB) monetary policy decisions today and on May 4.
The US ADP Employment report for April almost doubled the forecasts, as private hiring increased to almost 300K. The Fed is expected to raise rates b 25 bps, though Powell’s message is still uncertain. The EUR/USD is trading around 1.1050, above its opening price by 0.44%. Risk-on impulse took over, despite renewing banking concerns in the US. The pair is trading at 1.1046 at the time of typing.
Wall Street is trading with gains, but lower US Treasury bond yields undermined the US Dollar (USD). April’s ADP Employment Change report showed that the economy added 296K jobs, exceeding forecasts of 148K. The EUR/USD pair has been underpinned by the ISM Non-Manufacturing PMI for April, the Unemployment Rate for March, and the Federal Reserve’s 25 bps rate hike.
This data has caused a reaction in the pair, with the EUR/USD diving to the 1.1020s before bouncing and climbing to its daily high at 1.1060. The Federal Reserve’s 25 bps rate hike is already priced in, but a 50 or 25 bps increase is likely after the latest EU inflation data report. This has been the reason that underpinned the pair during the last two months.
