In the Asian session on Friday (June 2), the EUR/USD rose to 1.0762, an increase of 0.02%. The minutes of the ECB meeting showed that almost all policymakers supported a 25 basis point rate hike in May. Some of those members also initially favored a 50 basis point hike in the key rate. But most members strongly disagreed with re-emphasizing the rate hike message in the forward guidance.
The latest from the European Central Bank:
The ECB’s hawkish stance was supported by labor market data, with the euro zone unemployment rate falling to 6.5% in April, the lowest level since 1993. A tight labor market could put additional upward pressure on prices despite lower energy prices and slower economic growth. Some foreign exchange analysts pointed out that a strong labor market and the hawkish attitude of the European Central Bank are conducive to the strengthening of the euro. Unlike the Fed, which needs to maintain maximum employment, the ECB is only concerned with its inflation target. EUR/USD is back above the 1.07 mark, with EUR/USD continuing to trade above this key level following the release of the ECB minutes.
