"EURUSD remained under pressure and closed yesterday's session lower for the fourth consecutive day, showing that the U.S. dollar is gaining clearer short-term strength. The pair is currently trading around 1.1650, down slightly by 0.1% on the day. This movement reflects the market's adjustment of Fed policy expectations after a series of hotter-than-expected U.S. inflation data."
"The main pressure on EURUSD comes from U.S. CPI and PPI data. April CPI rose 0.6% month-on-month and 3.8% year-on-year, while core CPI increased 0.4%. At the same time, April PPI rose sharply by 1.4% month-on-month and 6.0% year-on-year, indicating that input cost pressures remain significant. These figures have raised concerns that U.S. inflation may stay elevated for longer, thereby reducing expectations that the Fed will cut interest rates soon."
"The Fed continues to maintain a cautious stance, while the latest comments from Fed officials remain tilted toward prioritising inflation control. After the meeting on 29 April 2026, the Fed kept interest rates unchanged in the 3.50%-3.75% range and emphasised that it would remain data-dependent. Notably, Fed officials recently stated that inflation remains the most urgent risk to the U.S. economy, especially as PCE could continue to rise. This reinforces expectations that the Fed has limited room to ease policy in the near term, thereby continuing to support the U.S. dollar and putting pressure on EURUSD."
"On the Eurozone side, the euro still has some support from inflation data. Eurozone inflation rose to 3.0% in April, up from 2.6% in the previous month, mainly driven by higher energy prices. This has led the market to consider the possibility that the ECB may find it difficult to ease policy too soon if price pressures continue to persist. However, support from the Eurozone has not been strong enough to reverse the short-term downtrend in EURUSD."
EURUSD stays under pressure and closes lower for a fourth straight day, reflecting clearer short-term U.S. dollar strength. The pair trades near 1.1650, down slightly, as markets adjust Fed policy expectations after hotter-than-expected U.S. inflation. U.S. CPI rose 0.6% month-on-month and 3.8% year-on-year, with core CPI up 0.4%. U.S. PPI increased 1.4% month-on-month and 6.0% year-on-year, signaling persistent input cost pressures. These results raise concerns that U.S. inflation may remain elevated longer, reducing expectations for near-term rate cuts. The Fed keeps rates unchanged at 3.50%-3.75% and remains data-dependent, emphasizing inflation control as the most urgent risk. Eurozone inflation rose to 3.0% in April, mainly from higher energy prices, but this support is not strong enough to reverse the downtrend in EURUSD.
Read at London Business News | Londonlovesbusiness.com
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