The Retail Sales for May came in slightly above expectations yesterday. At the same time, the initial jobless claims remain at stable levels. That means the cooling of the labor market is progressing only slowly. Further data surprises over the coming weeks would increase the likelihood of a further rate hike over the coming weeks.

We see a high likelihood that the Fed will hike interest rates again in July. So there is still some potential for a surprise there, which might support USD on a temporary basis. However, as our economist project rate cuts for the US central bank next year, EUR/USD is likely to climb sooner or later.