EUR/USD consolidates in 1.1400 area in thin US holiday trade as markets mull hawkish Fed bets

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EUR/USD consolidates in 1.1400 area in thin US holiday trade as markets mull hawkish Fed bets By Frank_Macro EURUSD Fed

nditions across asset classes. EUR/USD is thus flat on the day in the 1.1400 area, as it consolidates above support in the 1.1380 area in the form of December/late-November highs and below last week’s near-1.1500 highs. Though the Fed has entered blackout ahead of the January 25-26 meeting next week, the debate over the outlook forpolicy in 2022 and beyond remains the hottest topic in the market right now.

US bond markets are closed but the implied yield on the US 10-year treasury note future went as highs as 1.86% in earlier trade, whilst data last Friday from the CFTC showed speculator’s net short bets on the US 10-year future had hit its highest since February 2020. If speculators are right and US yields do resume their march higher this week, this could provide some much-needed assistance for the US dollar, which got battered last week on an unwind of crowded long bets.

 

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