In the Asian session on Thursday (June 8), EUR/USD strengthened, temporarily reporting 1.0707, an increase of 0.09%. Expectations of a rate hike from the European Central Bank helped support the euro.
The latest from the European Central Bank:
Strategist Jussi Hiljanen said the ECB may shift its focus to keeping interest rates at peak levels for a longer period of time rather than continuing to raise rates. The hawks appear to have calmed down after the release of euro zone inflation data in May, and are now less explicitly pushing for an autumn rate hike and are now more inclined to keep rates at peak levels for a longer period of time. The ECB is expected to hike rates by 25 basis points in June and July, bringing the deposit rate to 3.75%. Hiljanen said summer CPI data from the euro zone will be a key factor in determining whether the July rate hike is indeed the last.
