EUR/USD hits one-year highs above 1.1100 as DXY drops sharply
The US Dollar accelerated its slide across the board after the release of US CPI data. Inflation slowed down in the US, and the markets are now looking at a final Fed rate hike in July. The EUR/USD pair gains more than a hundred pips, climbing to its highest level since March 2022.
The EUR/USD pair continued to rise after the beginning of the American session, climbing to 1.1125, which is the highest level seen since March 2022. The pair remains near the top as the US Dollar continues under pressure following the release of US inflation data.
Inflation slows down, Dollar tumbles, and Wall Street rises
In June, the Consumer Price Index (CPI) rose 0.2% in the US, which was below the expected 0.3%, and the annual rate slowed to 3%, the lowest since March 2021 and below the expected 3.1%. Following the report, the US Dollar tumbled across the board, and US yields slid.
The US Dollar Index is trading at its lowest level in a year, at 100.60, falling for the fifth consecutive day. The US 10-year bond yield is at 3.87%, down 2.50%, and at a one-week low, far from the 4.09% it reached on Monday.
Market participants still expect a rate hike at the next FOMC meeting on July 25-26. However, bets of another rate hike before year-end have significantly reduced after the inflation data.
EUR/USD above 1.1100
The EUR/USD pair is having its biggest daily gains in months. In the daily chart, the Relative Strength Index is reaching 70; however, no signs of a correction are seen, and the momentum remains firm for the Euro. The 1.1090/1.1100 area has become the immediate support. On the upside, a strong resistance level emerges around 1.1170.