NewsSigns of US slowdown slam dollar, euro mixed on ECB hawkish surprise

Disappointing economic data out of the US brought yields down worldwide and removed any chance of a 100 basis point interest rate hike from the Federal Reserve this week.

The surprise 50bp hike from the ECB had surprisingly little immediate impact on the common currency, which nevertheless joined in the general bounce back against the US dollar.

Wednesday’s Federal Reserve meeting will dominate financial news this week. Also important will be the inflation report out of the US and the Eurozone, both out on Friday. The key question for markets is how fast the slowdown in activity evident in most economic areas will translate into downward pressure on inflation data. This will be the key question the Federal Reserve will be grappling with at its July meeting.

Read more at Ebury Weekly FX Market Update