Euro Forecast: EUR/USD Rebounds, Continues to Influence USD Direction

Major Developments Shake the US Dollar

This past week saw significant movement in the currency markets, with the US dollar weakening against several leading currencies, including the Euro. The decline followed reports that the Department of Justice has launched a criminal investigation into FOMC Chair Jerome Powell, focusing on his statements last summer about renovations at the Federal Reserve. The news caught many off guard, though as I mentioned in my Friday update, it was always possible that Trump might target the dollar—particularly if Tuesday’s CPI numbers showed a sharp increase. Now, with this major headline making waves, the market’s attention is fixed on what’s next, even before the CPI data is released.