Decline in EURUSD continues. Overview for 13.04.2022
EURUSD remains weak and continues retreating.
The major currency pair hit the lowest levels of the month. The current quote for the instrument is 1.0834.
Yesterday’s key highlight was the CPI report from the US. The indicator showed 8.5% y/y in March after being 7.9% y/y in the previous month and against the expected reading of 8.4% y/y. it’s the highest increase since 1981.
It would seem that market players’ reactions should have been furious. However, they were expecting even more negative results, because the White House earlier said that inflation might get much higher.
Now, after learning the latest CPI data, investors see that the inflation rally continues and hasn’t probably reached its peak yet. It means that the “greenback” might yet experience more significant fluctuations in the future.
Before the CPI report was released, market players implied a 37% probability of the next two rate hikes of 125 basis points each. Now they might want to reevaluate these numbers. The key scenario suggests a smaller rate hike after each of the Fed’s next six meetings.
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