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Euro jumps above 1.167 as traders brush off hawkish Fed minutes
EUR/USD rose more than 0.85% even as Fed minutes showed no move toward easing, while Europe’s July HICP edged higher to 2.9% and reinforced expectations of an ECB rate hike.
EUR/USD climbed more than 0.85% in the North American session as traders focused less on the Federal Reserve minutes, which were characterized as hawkish. The minutes included no discussion of easing policy, and they also noted a query from new Fed Chair Kevin Warsh about whether hosting fewer monetary policy meetings would allow more full data to be incorporated, with the 2026 meeting schedule said to remain unchanged, according to FXStreet.
FXStreet reported that traders also weighed signs the US Treasury is concerned about elevated long term yields, pointing to long end buyback activity described as a form of yield curve control to suppress rates seen as too high and at risk of derailing the economic expansion. On the European side, July Eurozone HICP rose to 2.9% from 2.8% in June, and underlying inflation increased to a 2.5% pace from 2.4% in June.
Those data, FXStreet said, added support to expectations for tighter European policy, with the ECB, led by Christine Lagarde, expected to raise rates by 25 basis points at its September 10 meeting. Money markets were pricing an 88% chance of a hike, using Prime Terminal data, while the US calendar ahead includes Initial Jobless Claims and a speech by St. Louis Fed President Alberto Musalem.
On FX technicals, EUR/USD was trading around 1.1673, and FXStreet said the pair held a near term bullish bias after moving above longer-term support near 1.1470 and reclaiming a trend line break near 1.1459. The 14 period RSI was at 72.8, indicating the market was in overbought territory, with resistance cited near 1.1849 and early support levels not fully shown in the source.
Latest closeEUR/USD 1.157 ▲0.4%