May 27, 2021 20:51 GMTFXStreet News
EUR/USD fluctuates in a narrow band on Thursday.
US Dollar Index steadies around 90.00 after US data.
Focus shifts to Friday’s key data releases from the EU and the US.
Following Wednesday’s decline, the EUR/USD pair seems to have gone into a consolidation phase and remains on track to close little changed around 1.2200.
Eyes on Friday’s high-tier data
Earlier in the day, European Central Bank (ECB) Governing Council member Pablo Hernandez de Cos said that the rise in inflation in the euro area was transitory but this comment failed to trigger a meaningful market reaction. Meanwhile, Bundesbank President Jens Weidmann argued that it was crucial to keep fiscal support measures targeted and limited in time. “It must be clear to everyone that we are not putting monetary policy at the service of fiscal policy,” Weidmann added.
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Inflation is feared by U.S. consumer sentiment
Fears of rising inflation by Americans are weighing on consumer sentiment, and concerns about how the U.S. economy will recover from the pandemic are mounting.
The University of Michigan’s Consumer Sentiment Survey fell to 82.8 in May, down from 88.3 in April, as it weakened consumers ’attitudes about current and future conditions. According to a survey of economists by Reuters, it looks closely at expectations for the width to rise to 90.4.
The decline in sentiment is unpredictable: the rapid expansion of U.S. vaccines, the reopening of the economy, and the distribution of stimulus controls were expected to boost consumer confidence.