EURUSD surges ahead of ECB rate hike
The euro is strengthening as the ECB raises interest rates by about 25 basis points. Eurozone headline inflation may have slowed last month, but core inflation readings remain stubbornly high. The single currency could benefit from improving fundamentals and a catch-up effect. Contrary to the sentiment of a few months back, recessionary pressures across the bloc have eased. While the US counterpart will deliver a final increase, the ECB still has room to go a little further. The market is settling on a 25-bp increase, but an upside move of 50-bps could be possible. The pair is headed towards 1.1250 The following are some examples of how to use 1.0850 As your closest support.
AUDUSD softens over dim economic outlook
The Australian dollar is struggling amid weak global economic data. The fall in core consumer price in the first three months of the year caught the market off guard and could confirm inflation is past its peak. This would reduce the pressure on the RBA to raise interest rates this month, with traders expecting it to keep its cash rate the same. A dovish position could lead to increased caution on commodity markets. As traders have already noted, Australia is a major copper exporter and its currency could trend lower along with the metal.
