According to data released Friday, eurozone inflation is at an all-time high, prompting speculations for an ECB interest rate hike this month.
Head of G10 FX strategy at CIBC, Jeremy Stretch, stated that he expects the headwinds on the euro to continue even as he foresees the ECB increasing interest rates by 25 basis points.
Euro traded flat at $1.0423 on Monday and risks pushing lower, all things being equal.
Global recession concerns have continued to favour the dollar despite markets scaling back on their U.S. rate hike expectations. The U.S. dollar index is up by merely 0.1% and trading at 104.97 at the time of writing this report. Despite not edging lower, it is still far behind May’s two-decade high of 105.790.
We don’t expect a lot of movement in the market today as Monday is the Independence Day holiday in the U.S.