EURUSD WEEKLY INSIGHT Euro / United States DollarCMCMARKETS:EURUSDShavyfxhub EUR/USD weekly close (as of June 19, 2026): Approximately 1.1467–1.147. The pair closed the week around 1.1469 on Friday, showing mild weakness amid broader USD resilience.  Central Bank Heads (as of June 2026) • ECB: President Christine Lagarde (still in role). • Fed: New Chair Kevin Warsh (sworn in around May 2026; this was his first FOMC meeting as chair).  Interest Rates (Latest Decisions) • ECB (June 11, 2026): Raised key rates by 25 bps — Deposit facility to 2.25%, Main refinancing operations to 2.40%, Marginal lending to 2.65%. First hike since 2023, driven by energy/inflation pressures (e.g., geopolitical factors).  • Fed (June 16-17, 2026): Held federal funds rate steady at 3.50%–3.75%. Hawkish tilt under Warsh; dot plot shows median 2026 end rate at ~3.8% (implying potential hike(s)), with 9 of 18 participants seeing at least one hike this year.  Interest rate differential: Roughly 1.1–1.5% in favor of the US (Fed funds vs. ECB deposit rate). This supports USD strength via carry and capital flows, though the recent ECB hike narrowed it slightly.  Bond Yield Differential • US 10Y Treasury yield: Around 4.45–4.49% recently.  • German 10Y Bond yield: Around 2.90–2.99%.  Differential: ~1.5% (US higher). Wider spreads historically favor USD appreciation (capital flows to higher-yielding US assets). This remains a key driver for EUR/USD pressure.  Uncovered Interest Rate Parity (UIP) and Carry Trade • UIP basics: Suggests the currency with the higher interest rate (USD) should depreciate over time to offset the rate advantage. In practice, UIP often fails in the short/medium term — “forward premium puzzle” means high-yield currencies frequently outperform (carry trades profit). • Current setup: Positive carry for long USD/short EUR due to the ~1.1–1.5% differential. Investors borrow in EUR (lower rate) to invest in USD assets. This has supported USD strength, though geopolitical risks, safe-haven flows, and growth divergences add layers.  • Unfinished/ deviations: Parity doesn’t hold perfectly due to risk premiums, capital controls, growth expectations, and policy uncertainty. Recent data shows USD resilience despite some narrowing, with carry trades active but vulnerable to sudden unwinds (e.g., volatility spikes).  Overall Direction/Bias Mildly bearish to neutral on EUR/USD (favoring USD strength or limited EUR upside) in the near term: • USD supportive factors: Higher rates/yields, resilient US growth, Warsh’s hawkish shift, carry advantage, and safe-haven demand. • EUR headwinds: Energy sensitivity, weaker relative growth, though ECB hike provides some counter. • Risks: Geopolitical events (e.g., Middle East), US data surprises, or rapid differential narrowing could shift momentum. Technicals show the pair in a choppy range below recent highs.  Disclaimer;this Not a financial advice; consult professionals and do your own research. #eurusd