Ella 
In Asia on Thursday, EUR/USD held steady near 1.0950, trying to maintain the gains from the previous trading day. EUR/USD got a boost as the U.S. dollar (USD) struggled to maintain strength despite U.S. Treasury yields rising on the back of positive inflation data. Market participants are eagerly awaiting U.S. core producer price index (PPI) and retail sales data due later today.
However, the CME FedWatch Tool shows that market participants maintain their bets on the U.S. Federal Reserve (Fed) cutting interest rates in June, with a probability of 67.2%. U.S. Treasury Secretary Janet Louise Yellen commented that it seems unlikely that interest rates will return to pre-pandemic levels. She also noted that the interest rate forecasts outlined in President Biden’s budget plan are considered “appropriate” and in line with broad market expectations.
On the other hand, market expectations for the European Central Bank (ECB) to reduce borrowing costs in June are rising, and the ECB’s words may weaken the euro. The European Central Bank is still likely to cut interest rates in the spring, policymaker Francois Villeroy de Galhau said on Wednesday, stressing that it remains vigilant about inflation while expressing confidence that it is about to overcome the Current economic difficulties.
