EURUSD is consolidating. Overview for 11.05.2022

11.05.2022

EURUSD has fixed within a sideways range while waiting for important news. 

The major currency pair is consolidating inside the range not far from the lows. The current quote for the instrument is 1.0568.

Investors are still analysing the US Fed’s actions and predicting its future moves. It’s been a week since the regulator’s latest meeting but emotions are still running high. Some monetary policymakers are confident that the Fed should go by the statistics and adjust its stance as far as the numbers change. On the other hand, the others believe that the regulator should be proactive.

For example, the President and CEO of the Federal Reserve Bank of Atlanta Raphael Bostic says that the Fed’s monetary policy should remain reliable and adaptive. In his opinion, the neutral rate value is 2.0 2.5% and he is waiting for the US GDP to gain 2.6% at the end of 2022.

The benchmark interest rate is highly likely to be raised after each of the Fed’s meetings this year. 

Today, market players are switching their attention to the April CPI data from the US. Average market expectations imply 8.5% y/y, which might be a multi-year high. The measures to tighten the monetary policy taken by the Fed will produce an effect in 2-3 months, at the earliest. It means that one shouldn’t expect inflation to drop before the end of the summer. 

Experts believe that an inflation boost over the predicted readings might support the “greenback” because it might force the regulator to act more aggressive.

Attention!

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.