EUR/USD steadies around 1.0900 post Germany’s Buba Monthly Report

After six straight days of losses, the EUR/USD is now trading near 1.0900. at the time of writing, the pair is seen at 1.0895. Upside inflation concerns were alluded to in the German Buba Monthly Report, which encouraged hawkish bets on the European Central Bank.

Investors are looking forward to Jerome Powell and Christine Lagarde’s presentations at the Jackson Hole Symposium on Thursday, where they will likely discuss their different monetary policies.

According to the analysis, inflation may continue to rise above the central bank’s targets for a longer period of time, prompting hawkish bets on the ECB. According to the World Interest Rate Probability (WIRP), markets are betting on a 25-basis point increase at the meeting on September 14 with odds of that happening increasing to 75% and 85% for the meetings in October and December.

These hawkish wagers increase interest in the Euro relative to its competitors. In anticipation of the S&P PMI data on Wednesday and Jerome Powell’s speech at the Jackson Hole Symposium, where they will be looking for hints on forward guidance, the US dollar is trading unchanged. Markets are currently discounting the Fed’s anticipated increase in September and the possibility of a 25-basis point increase in November by almost 40%.