EUR/USD drops as 50 basis point hike not ruled out, gold slips prior to FOMC minutes [Video]

EUR/USD drops, as 50 basis point hike not ruled out

EURUSD was a big mover during the hump-day session, as traders responded to news that the ECB has not ruled out a 50 basis point hike.

We saw a similar quote attributed to the Federal Reserve prior to their last hike, and it seems the ECB could be following this playbook.

Speaking today, Senior official at the European Central Bank,  Klaas Knot stated that he was unable to refuse such an increase in rates.

He went on to add, “We can only afford gradualism if inflation expectations remain well-anchored. If you now look at the various measures of inflation expectations in the euro area, they are now what I would say at the upper limit of still being well-anchored”.

As a result, EURUSD dropped on Wednesday, following recent back-to-back gains.

Gold slips, prior to FOMC minutes

Following recent gains, Gold fell lower on Wednesday, as markets were preparing for the release of FOMC minutes.

The minutes will show the thinking behind the Fed’s 50 basis point hike in April, but also their views for the upcoming months.

Many expect that inflation will peak in Q£, with the U.S. economy entering recession as a result.
 
Indices were mostly unchanged ahead of Wednesday’s minutes, with the USD gaining on the day.

XAUUSD fell to a low of $1,847 earlier today.