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EUR/USD Appears Ready for a Pullback Due to Inflationary Factors in the USA
EUR/USD has risen approximately 1% this week due to a decline in the dollar, although the euro is trailing behind other pro-cyclical currencies in the G10, excluding the US data-sensitive CAD. This isn't unexpected, as the euro has the weakest three-month correlation with two-year USD swap rates, which previously insulated it from significant upward adjustments in Fed expectations. chart The 1.0900 level is unlikely to be a significant resistance point if US economic data. However, a move to the 1.1000 level appears premature given the persistent inflationary pressures in the US. We are not particularly concerned ... (full story)