Ella 
EUR/USD fell to around 1.0730, snapping a three-day winning streak in early European trading on Thursday. However, the upside for the pair appears limited as investors worry about political uncertainty in the eurozone. Investors will be closely watching the preliminary June Purchasing Managers’ Index (PMI) readings for the eurozone and the United States, which will be released on Friday.
The snap election held in France after the defeat of the far-right party in the national referendum has sparked caution, exacerbating concerns about political uncertainty in the eurozone and weighing on the euro. In addition, the divergence between the eurozone and the United States in monetary policy could further drag the euro lower. On Wednesday, Mario Centeno, a member of the European Central Bank’s (ECB) Governing Council, said the central bank could ease monetary policy further as long as inflation remains tame.
Across the pond, a weak U.S. retail sales report showed signs of sluggish U.S. consumer activity, fueling the case for a rate cut by the Federal Reserve (Fed) later this year, which could weaken the dollar in the short term. However, the hawkish tone of several Fed officials could limit the dollar’s downside. Boston Fed President Susan Collins warned on Tuesday that it was too early to say whether inflation was heading toward the Fed’s 2% target, while Richmond Fed President Thomas Barkin said he would need to wait for a few more months of economic data before considering a rate cut.
