Euro continues to rally in the markets, even without the help of macro statistics. Apparently, many investors are convinced that EU authorities will lift the quarantine restrictions this 3rd quarter, which is why demand for risk assets is growing.

Aside from that, the Federal Reserve reassured the markets that there is nothing to fear about the sudden jump of US inflation. According to them, everything is going according to plan.

Republicans also said they are going to submit a revised proposal to the White House regarding Biden's new spending plan. It will include programs for roads, public transportation and airports. However, an approval of this bill will lead to a drop in US dollar.

Going back to the Federal Reserve, Vice Chairman Richard Clarida said the weak figures on the US labor market indicates that the economy is not yet ready for any cutback on bond purchases. He said the sector still needs significant progress, hence, the central bank will refrain from making abrupt decisions. They will observe first the state of the US economy this year and then come up with necessary actions.

These statements helped restrain the growth of US bond yields.

As for Europe, Italy is reported to be moving towards the full opening of its economy, thanks to the strong vaccination program in the country. Apparently, the number of infections has dropped significantly, therefore, the new prime minister, Mario Draghi, agreed to begin phasing out the nationwide curfew, which is currently set at 10:00 pm Bars and restaurants will also be allowed to serve customers inside the establishments, and citizens will have access to outdoor sports grounds and shopping malls on weekends.

Of course, Draghi knows that these measures will accelerate consumer spending, which will positively affect Italy's economic growth. In April, consumer prices have already jumped by 1.1% and energy prices have risen by 9.8%. On a monthly basis, CPI is up by 0.4%, but core inflation has dropped to 0.3%.

With regards to the United States, the New York Fed reported that business conditions slipped to 24.3 points in May, from 26.3 points in April. Nevertheless, the reading still indicates growth in the sector.

Meanwhile, the housing market index stayed the same, still at 83 points. This suggests that homebuilder confidence is strong, thanks to low mortgage interest rates.

As for the EUR/USD pair, a lot depends on 1.2180, as a break above it will result in a larger jump towards 1.2210 and 1.2250. But if the quote consolidates below the level, the euro will collapse to 1.2140 or lower.

GBP

Pound also rallied even without the help of strong UK statistics. The main reason is Prime Minister Boris Johnson's statement that the UK economy might fully reopen this summer.

Aside from that, the average asking price for UK homes jumped by 1.8% (£ 5,767) this May, hitting a record £ 333,564. Apparently, demand for real estate increased as people have now adjusted to the new lifestyle the pandemic brought.

As for the GBP / USD pair, a lot depends on the 42nd figure, as a break above it will result in a larger jump towards 1.4250 and 1.4310. But if the quote consolidates below the level, the pound will collapse to 1.4140 or 1.4080.