Published on 23.03.2022 13:30

The Euro managed to claw back some losses against the greenback towards the end of yesterday’s trading session while the US Dollar Index also ended up closing in negative territory. The benchmark 10-year US Treasury bond yield surged to its highest level since May 2019 as investors sought the safe haven of the US government on the back of geopolitical issues such as the conflict between Ukraine and Russia.

As we head into today’s trading session traders remain cautious placing bets in the Euro as the markets await a speech from US Federal Reserve President Jerome Powell where the main focus will be if he will reinforce the need of a 50 basis point rate hike next month should the situation be warranted.

While Powell’s recent comments are mainly responsible for the latest speculation about a 50 point rate hike, St Louis Fed President James Bullard and Cleveland Fed President Loretta Mester have also given their backing for such a move to reign in inflation which is sitting at its highest level in more than 4 decades.

Some other news to watch regarding the EUR/USD currency pair will be the February New Home Sales data from the US and the European Commission's preliminary Consumer Confidence report for March.

As we can see on the chart, the EUR/USD currency pair has once again found support at the $1.0988 level, but this is likely to be challenged when Fed president Powell gives his monetary speech later today.

If he does reiterate a 50-point rate hike may be warranted in the coming months the Euro is likely to drift lower to end the trading session.


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