By Akhtar Faruqui
- EUR/USD gains ground on dovish remarks from the Federal Reserve.
- Fed Chair Powell underscored the persistent nature of price growth remains a significant concern.
- ECB’s Lagarde underscored concerns regarding lower wage inflation.
EUR/USD extends its gains for the second consecutive session as the US Federal Reserve (Fed) maintained its benchmark rates at 5.5% during Wednesday’s policy meeting. The pair rises to near 1.0930 during the Asian trading hours on Thursday.
In the post-meeting press conference, Federal Reserve (Fed) Chair Jerome Powell’s remarks, indicating a dovish stance, further weighed down the Greenback. Powell underscored that while inflation is exhibiting signs of moderation, the persistent nature of price growth remains a significant concern that the Fed cannot overlook.
On the European front, President of the European Central Bank (ECB), Christine Lagarde, underscored concerns regarding lower wage inflation, a factor previously emphasized by the ECB as pivotal in determining future policy decisions.
Additionally, the Vice-President of the ECB, Luis de Guindos, cautioned against premature action, stating that a wait-and-see approach is warranted due to persistently high service inflation. Echoing this sentiment, ECB policymaker Pablo Hernandez de Cos hinted at the possibility of rate cuts in June, contingent upon incoming data.
