Title: EURUSD price holds steady above 1.0200 ahead of German IFO
July 25, 2022 12:36 AM ET
The EURUSD is struggling to continue the renewed uptrend above 1.0200 as investors assess global recession risks ahead of the key Fed rate hike decision this week.
The U.S. dollar is returning to the red zone after the early March rally, providing some support to the major currency pair. Concerns about a global economic slowdown weakened investor confidence and encouraged a sell-off at the start of the week, helping the safe-haven dollar recover from the lows it hit against its major peers on Friday.
Traders remain cautious ahead of earnings reports from U.S. tech giants, which could limit the spot market's upside. In addition, stabilizing U.S. Treasury yields and expectations of a 75 basis point Fed rate hike this week are also acting as headwinds to the EURUSD's recovery.
Markets also digested recent comments from ECB President Christine Lagarde, who said the central bank would keep raising interest rates until inflation fell back to its 2% target. Meanwhile, ECB hawk Robert Holzmann said over the weekend that "we will see in the fall what the economic situation is." Then we can probably decide whether to do another 0.5% or less. "
The immediate focus now turns to the German IFO economic expectations, which will be published on Monday. That sentiment data will be critical after preliminary S&P Global Business PMIs for the eurozone and Germany showed contraction in July on Friday, reigniting fears of a eurozone recession. Political unrest in Italy is also likely to remain a risk for the single currenc