EURUSD has no support. Overview for 04.03.2022

EURUSD updated its lows of 2020 and may fall deeper. 

The major currency pair continues weakening on Friday. The current quote for the instrument is 1.1023.

Demand for the USD can be explained by a global risk aversion. 

Yesterday was the second day the Fed Chairman Jerome Powell spoke to Congress. This time, he said that the energy prices upsurge had an expected influence on the country’s economy and might impact inflation. In his opinion, the regulator should have admitted that high inflation might be a long-term factor a long time ago.
Powell mentioned that there was slight progress in the supply chain issue. It’s not clear yet how to solve this problem completely but the progress is evident. In case of success, inflation is expected to drop. 

The labour market was another aspect the Chairman was focused on. For example, Powell said there were no problems with the labour demand, and that’s good. However, confirmed that there were some troubles with the labour supply and the decline in actual earnings. If again, the regulator manages to take inflation under control, these indicators should reach stability. 

So, Powell did say that the labour market was a bit overheating. Whether it is true or not – investors will find out later today, when the US will report on the Unemployment Rate and the Non-Farm Payrolls for February. The strong data will support the “greenback”.