The EUR-USD pair failed to maintain its positive momentum - the asset is retreating.
The major currency pair came under pressure again in the middle of the week. The current quota for the instrument is 1.0499.
According to BBVA, US bond yields may continue to rise until the moment the US Federal Reserve stops raising the base interest rate. And it sounds something like this - future expectations suggest 3.4% in mid-2023. US bond yields are steadily rising and provide significant support to the greenback.
In addition, the US currency is back in the spotlight due to global risk aversion.
At the same time, the euro is receiving little support as the European Central Bank is not as aggressive when it comes to raising rates as the US regulator. The next rate hike could be in two months, so why bother now?
Fed Chairman Jerome Powell is scheduled to speak later today. If his comments on the regulator's monetary policy are hawkish enough, the dollar will have more reason to continue rising.
Investors are slowly shifting their attention to Thursday when the Eurozone releases its PMI report. If the numbers turn out to be stronger than expected, it will tip the scales in favor of the euro.