EUR/USD consolidates below 1.1850 ahead of Lagarde, ECB minutes
- EUR/USD recovered sharply from the previous day’s low near 1.1780 on Friday.
- ECB announced a new monetary policy strategy on Thursday, adopting a 2% inflation target.
- US dollar index remained steady below the 13-week high near 92.45.
EUR/USD accumulated minor losses on Friday morning Asian’s session. The pair took shelter near the multi-month low around 1.1795. As of writing, the EUR/USD was trading at 1.838, down 0.04% for the day.
The US Dollar Index (DXY), which tracks the greenback performance against six major rivals, held steady below its 13-week high, despite softer US economic data and a fall in the US 10-year benchmark Treasury yields.
Investors stay invested in the US dollar as the sentiment sours on renewed coronavirus infections, due to the highly contagious Delta variant and jitters to economic recovery.
On the other hand, the shared currency managed to hold the ground against the greenback after the ECB announced a new monetary policy strategy on Thursday. The ECB’s new policy made room, which would allow inflation to overshoot.
In its first strategy review since 2003, the ECB adopted a 2% inflation target over the medium term, compared to the previous below but close to a 2% inflation target.
The Eurozone is expected to expand at 4.8% in 2021, and 4.5% in 2022 as compared to May’s estimate of 4.3% and 4.4% respectively as per the revised ECB’s revised growth projections.
Reduced risk appetite and the modest USD strength keep gains limited for the pair.
EUR/USD additional levels
Author
Rekha Chauhan
Independent Analyst
Rekha Chauhan has been working as a content writer and research analyst in the forex and equity market domain for over two years.
