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EUR/USD Softens in Response to Fed Minutes; ADP Report Due Thursday

Published 06/07/2023, 09:53
© Reuters.
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The EUR/USD posted losses for the third day running on Thursday, with the currency pair marking a low of 1.0833 before the start of the European session.

Yesterday morning, the Euro Dollar was hit by downward revisions to European PMI figures for June, with the overall composite index for the Eurozone coming in at 49.9 points compared with 50.3 expected and 52.8 previously.

In the evening, the currency pair was then affected by the Fed Minutes, which contained hawkish elements, reinforcing expectations of further Fed rate hikes.

Indeed, the Fed Rate Barometer Investing.com now shows a 90% probability that the Fed will raise rates by 0.25% on 26 July, and more than a third that this rate hike will be followed by another before the end of 2023.

Against this backdrop, the dollar strengthened, mechanically sending EUR/USD lower.

In terms of important events for EUR/USD this Thursday, forex traders will be watching eurozone retail sales at 11am, before the ADP (EPA:ADP) private employment report at 2.15pm, followed by the US ISM services report at 4pm.

Article translated from French using DeepL.

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