EUR/USD rebounds thanks to the ECB and the SNB
EUR/USD price has been rallying since last week after falling back to its May low of around $1.0350 on the back of better than expected US inflation data.
The single currency has been supported for several sessions by the ECB, which reassured operators by announcing that it wanted to put in place an anti-fragmentation system, while maintaining its rate hike scheduled for July.
The euro also benefited from the unexpected decision of the SNB to raise its rates by 50 basis points. Investors did not expect the first rate hike from the central bank until September, which mainly supported the franc and put pressure on the dollar.
Attention should now turn to the many media appearances by central bankers, as well as the flash PMIs for June this week.
Longer term, the dollar remains the currency of choice in this period of uncertainty, but the fundamentals are turning more and more in favor of the other major currencies as traders seem to have already fully priced in the Fed’s monetary tightening , unlike other central banks like the ECB, the RBA and now the SNB.
EUR/USD 4 hour chart – key levels