Ella 
EUR/USD continued to move lower below the key support level of 1.0800 during the European session on Thursday. The major currency pair came under heavy pressure as the US dollar (USD) strengthened amid cautious market sentiment. The US dollar index (DXY), which tracks the value of the US dollar against six major currencies, jumped to a two-week high just above 105.00.
Investors rushed to buy the US dollar as they expect the Federal Reserve (Fed) will not be inclined to cut interest rates anytime soon. Fed policymakers have made it clear that they want to see inflation slow down over a period of months to gain confidence that price pressures will continue to return to the desired level of 2%.
Fed officials see more rate hikes as less likely, but they still leave the door open to rate hikes if the deflationary process stalls. For fresh clues on the interest rate outlook, investors will turn their focus to the US core personal consumption expenditures price index (PCE) data for April, which will be released on Friday and will have a significant impact on speculation of a rate cut by the Fed in September. Core PCE inflation is estimated to have risen steadily by 2.8% year-on-year and 0.3% month-on-month, respectively.
