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Dollar On The Offensive Amid “Hawkish” Fed

Summary

The greenback remains supported after some correction attempts earlier in the day on Wednesday.

The EURUSD pair is still under pressure despite the reports that Italy may offer concessions to the EU on deficit aims.

The pair’s unwillingness to show a more sustainable recovery is partly due to positive market expectations ahead of Friday’s US NFP data.

  The greenback remains supported after some correction attempts earlier in the day on Wednesday. The Fed officials’ rhetoric confirms the central bank’s commitment to further gradual tightening which helps the USD index stay close to six-week highs registered yesterday.

  The EURUSD pair is still under pressure despite the reports that Italy may offer concessions to the EU on deficit aims. It looks like traders refrain from euphoria amid a lack of details on the issue. However, the immediate downside pressure on the single currency has eased somehow. The price failed to challenge the 1.16 threshold during the Asian session and the risk of a decline towards the key 1.15 support remains.

  The pair’s unwillingness to show a more sustainable recovery is partly due to positive market expectations ahead of Friday’s US NFP data. The bulls hope to see strong employment and wages data which could fuel dollar demand further. Otherwise, EURUSD could get back above the 1.16 figure and thus get into positive territory on weekly charts.