The EUR/USD pair remained stronger on Tuesday and was trading 0.5% higher on the day at the time of writing, hovering at around 1.2130.
Traders reacted to the testimony of Secretary of the Treasury nominee Janet Yellen before the Senate Finance Committee. As her remarks were available ahead of the speech, everything had been digested before she started speaking.
Nevertheless, there was some volatility in the markets, especially in stocks.
She said that the US doesn't favor a weak US dollar (although the Fed and the Treasury are doing everything they can to debase the greenback).
Moreover, she added: "Neither the President-elect, nor I, propose this relief package without an appreciation for the country's debt burden, but right now, with interest rates at historic lows, the smartest thing we can do is act big. In the long run, I believe the benefits will far outweigh the costs, especially if we care about helping people who have been struggling for a very long time."
Basically, nothing is changing, and the deficit will continue to soar, while rates must remain at the historic lows, prompting inflation to accelerate. In that kind of environment, the USD should head further lower.
The EUR/USD pair managed to defend the first major support near 1.2060 and jumped higher, eyeing the initial resistance near 1.2170. If the euro gets through that selling area, it might revisit the cycle highs above 1.23.
Trading FX/CFDs on margin bears a high level of risk, and may not be suitable for all investors. Before deciding to trade FX/CFDs you should carefully consider your investment objectives, level of experience, and risk appetite. You can sustain significant loss.
Recommended Content
Editors’ Picks
AUD/USD falls amid highs US yields, Fed’s tough stance
The Australian Dollar posted losses of 0.23% against the US Dollar on Thursday amid higher US yields that underpinned the Greenback during the day. Wall Street hit new all-time highs but retreated afterward, ending the session with losses.
EUR/USD slipped on Thursday after Greenback pares some losses
EUR/USD eased slightly on Thursday, falling back below 1.0880 as the Greenback broadly recovers losses from earlier in the week. The pair remains up for the trading week, but a late break for the US Dollar is on the cards as investors second-guess the Fed's stance on rate cuts.
Gold loses its bright and tumbles on firm US Dollar, Fed hawkish comments
Gold prices fell in the mid-North American session on Thursday, below $2,390, as US Treasury yields recovered and underpinned the Greenback. Wednesday’s inflation report in the United States sponsored the golden metal rally, but Thursday’s data was a mixed bag, which could likely trigger some profit-taking ahead of the weekend.
LINK price jumps 10% as Chainlink races toward tokenization of funds
Chainlink price has remained range-bound for a while, stuck between the $16.00 roadblock to the upside and $13.08 to the downside. However, in light of recent revelations, the token may have further upside potential.
April CPI: Worst good news ever
The monthly rise in prices based on the Consumer Price Index (CPI) came in slightly lower than projected, sending a wave of euphoria across the financial landscape. The consensus is cooling inflation puts Federal Reserve interest rate cuts back on the table.