Title: EUR/USD pares intraday losses near 1.0250, Fed Minutes, EU recession in focus
August 15, 2022 12:44 AM ET
The EUR/USD is licking its wounds as traders prepare for the long week in the early hours of Monday morning in Europe. Nevertheless, the major currency pair remains on the decline for the second day in a row, while attention is focused on this week's Federal Open Market Committee (FOMC) meeting minutes and talk of recession in the Eurozone.
The recent rally in the quote may be related to the decline in the US Dollar Index (DXY) from its daily high.
The greenback index recently retreated from its daily high after headlines about the resumption of trading in Russian bonds emerged on Wall Street. Also helping the market's cautious optimism were headlines indicating an improvement in coronavirus conditions in China's financial center of Shanghai.
However, fears of a recession in the Eurozone, triggered mainly by the German energy crisis, weighed on market sentiment. The U.S. Federal Reserve's aggressive stance could also be in the same vein, despite weaker recent inflation data from the United States.
On Friday, Thomas Barkin, president of the Richmond Federal Reserve (Fed) Bank, said he wants to keep raising interest rates to bring inflation under control. "I would like to see a period of sustained inflation under control, and until then I think we need to move interest rates into the restrictive range," Barkin told CNBC (Reuters).
His comments came after the U.S. Michigan Consumer Sentiment Index (CSI) for August rose to 55.1 (flash) from 51.5 in July and the market expectation of 52.5. Further details showed that one-year inflation expectations fell to a six-month low of 5.0% from 5.2%, while five-year inflation expectations rose to 3.0% from 2.9%.