Euro Finds Support As Dollar Pulls Back Slightly Ahead Of US CPI, FOMC

Euro is steadying against the dollar on Wednesday after having stumbled to near a six week low due to political uncertainty in the Eurozone. Eurozone saw political instability after French President Emmanuel Macrons decision to call for a snap election after suffering a defeat by Jordan Bardella-led far-right National Rally. Besides, dollar staying cautiously lower ahead of a pair of data from US is supporting the single common currency. EURUSD pair is quoting at $1.0758, up 0.10% on the day. All eyes are glued to upcoming US inflation and FOMC outcome that is likely to provide fresh cues on timing of Federal Reserve (Fed) rate cuts.

Meanwhile, ECB's chief economist Philip Lane emphasized the need to maintain a restrictive monetary stance after the central bank lowered interest rates by 25 basis points last Thursday, taking the refi rate to 4.25 percent. That was the first reduction since 2019. From the Eurozone docket, data showed Germany's consumer price inflation increased for the first time in five months in May. Consumer price inflation rose to 2.4 percent in May from April's stable growth of 2.2 percent, which was the lowest rate in three years. On the other hand, EU-harmonised inflation climbed to 2.8 percent from 2.4 percent.

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