Title: EUR/USD slides below 1.0200 as ECBspeak traces Fed Minutes to highlight recession woes
August 18, 2022 02:38 AM ET
EUR/USD bears are attacking the near-term support line as European Central Bank (ECB) policymakers echo recession concerns from their U.S. counterparts and risk-averse catalysts from China could also put downward pressure on the currency pair.
ECB Executive Board member Isabel Schnabel said Thursday, "A recession alone would not be enough to get inflation under control." The ECB policymaker also supported the regional central bank's current policy. In response, ECB Governing Council member Martins Kazaks said in an interview with Latvian TV3 on Thursday, "The ECB will continue to raise interest rates to contain inflation," according to Bloomberg.
On the other hand, according to Reuters, the minutes of the latest Federal Open Market Committee (FOMC) meeting indicate that officials are prepared to slow the pace of rate hikes if there are signals that inflation is slowing. The news outlet added: "In their minutes of the July meeting released on Wednesday, Fed officials said the pace of future rate hikes would depend on incoming economic data as well as their assessment of how the economy was adjusting to the higher interest rates already decided."
Following the release of the Fed minutes, 10-year U.S. Treasury bond yields fell two basis points (bps) from their weekly high of around 2.90% to 2.89% at press time. Still, Wall Street posted losses, weighing on Asia-Pacific equities and stock futures.
Looking ahead, the final results of the Eurozone's inflation gauge for July, namely the HICP, which is expected to confirm the 8.9% mark, could provide immediate clues. Subsequently, the weekly results of the U.S. Initial Jobless Claims and the Philadelphia Fed Manufacturing Survey for August are likely to entertain EUR/USD traders.