The single currency fell by 0.22% against the US dollar to 1.1301 on Tuesday, January 25. The DXY index rose to a multi-month high of 96.26. The gains came amid a decline in the EURUSD pair, since the euro component of the index is 57.6%.
Germany's higher-than-expected IFO failed to lend support to the euro.
The pair remains under pressure due to a strong dollar amid heightened geopolitical tensions and an ambiguous outlook in the US fixed income and stock markets.
Today’s macro agenda (GMT+3)
By the time of writing, major currencies were trading in positive area. The euro stood at 1.1301, hovering below the 55-day SMA (balance line). The focus remains on the Fed’s two-day meeting. The central bank may accelerate steps to raise interest rates and shrink the volume of its UST bonds, which have inflated the balance sheet to $8.8 trln.
Given that the market has priced in three interest rate hikes in 2022, the dollar might retreat sharply across the board after Fed Chair Powell’s speech in line with a correction.
According to media reports this morning, China Evergrande Group will hold an investor call at 13:00 GMT on Wednesday. This is good news for risk-sensitive assets as the company has been attempting to avert default and restructure its debt.
On the hourly timeframe, EURUSD continues to trade in the range of 1.1220-1.1385. The range for the evening session is 1.1195-1.1420.