The greenback is still benefiting from geopolitics

The fibre enters its third day of consecutive losses on the back of a strengthening USD and resurging geopolitical tensions. The continued dovish stance of ECB policymakers is also weighing on the common currency. ECB Chief economist, Philip Lane, is seemingly more confident that inflation will return to the 2% target at the back of latest data. In fact, CPI estimates stood at 2.4% on a yearly basis for April. Lane tried to reassure market concerning the impact of a Fed delayed monetary easing on the Eurozone, saying that the effects would be largely contained as the different impact mechanisms work in opposite directions. The calendar will be relatively light today on the European side as several European countries are observing the Ascension day. The EUR/USD pair is currently trading at 1.0736.

Yesterday, Boston Fed governor Susan Collins indicated that an economic slowdown would be required in order to bring inflation closer to the 2% target. She also said that persistent inflation suggests that the Federal Reserve should maintain tight policy, adding that the US economy is in a good disposition to reach its objectives. Her fellow governor Lisa Cook argued in favour financial stability, an essential tool in order to achieve the Fed’s dual mandate. Cook explained how the financial stability framework aims to weigh various risks inherent to the financial sector as well as credit risk from households and firms and other risks in the financial system. Data due today include initial as well as ongoing jobless claims. San Francisco Fed governor Mary Daly is due to speak today. The greenback was trading at 105.62 against other majors at the time of writing.

Bank of England is poised to hold interest rates steady at 5.25% in order to maintain its focus on dwindling the 3.2% yearly inflation rate. However, the market expects the central bank to cut the 16-year high interest rates at the June monetary policy meeting. The cable was trading at 1.2479 at the time writing.