EUR/USD back under pressure as Asia picks up the baton

EUR/USD is trading lower by some 0.13% after falling from a high of 1.1013 to a low of 1.0982 so far.  The US dollar climbed on Wednesday as oil prices rallied again with US President Joe Biden poised to announce, alongside European leaders, new sanctions against Russia during his trip to Europe.

Traders are awaiting Biden to arrive in Brussels later on Wednesday to meet with NATO and European leaders in an emergency summit at the Western military alliance's headquarters. Sources said the US package would include measures targeting Russian members of parliament, Reuters reported. 

US stocks fell on the news while treasuries recovered from record losses ahead of tighter monetary policy to combat inflation. The S&P 500 lost 1.2%, led by losses in financials, while the 10-year Treasury yield dropped to 2.30% after reaching highs not seen since mid-2019. Traders are moving into bonds as Federal Reserve officials are indicating they are willing to raise rates aggressively to tame inflation, and the war in Ukraine has driven commodity prices up 26% this year.

Meanwhile, the Federal Open Market Committee member Loretta Mester favoured some 50bp hikes this year, adding that the economy has excess demand. She doubts rate hikes will cause a recession and that unwinding the balance sheet will help reduce distortions in the yield curve. St. Louis Federal Reserve President James Bullard's messaging remains as hawkish as ever also:

Fed's Bullard: US economy will continue to grow above trend this year and next