EUR/USD plunges to near 1.0740 as DXY rebounds aggressively, Eurozone HICP eyed

The EUR/USD pair has witnessed an intense vertical fall in the Asian session after the US dollar index (DXY) jumped higher in its opening trade. The major has been dumped by the market participants and a low of 1.0741 has been recorded from an intraday high of 1.0780.

The US dollar index (DXY) has moved higher in its early trade after the hawkish comments from Federal Reserve (Fed) Governor Christopher Waller. Fed policymaker in his speech at Institute for Monetary and Financial Stability has advocated a spree of 50 basis points (bps) interest rate announcements by the Fed until it finds a substantial reduction in the inflation rate. No doubt, mounting price pressures are advocating for some quick rate hike announcements as an inflation figure of more than 8% is a hard nut to crack.

Meanwhile, rising inflationary pressures in the eurozone are imposing intense pressure on the policymakers of the European Central Bank (ECB). On Monday, the annual Consumer Price Index (CPI) in Spain jumped to 8.7% vs. 8.03% as expected. While the inflation figure in Germany has shot to 7.9%, significantly higher than the former figure of 7.4%. More than expected CPI figures in Germany and Spain have removed the obscurity over the eurozone inflation. As per the market estimates, the Europe HICP is seen at 7.7%. The CPI figures from Germany and Spain are indicating that investors should brace for a significantly higher figure.