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The US dollar was a touch stronger against its major peers on Wednesday, as markets braced for potential negative headlines on the European energy crisis and the possibility of a downside surprise at this afternoon’s highly anticipated European Central Bank meeting.

Rising bets that the European Central Bank could join the ‘50 club’, and raise rates by half a percentage point at its meeting on Thursday, provided solid support for the euro yesterday, lifting EUR/USD comfortably away from last week’s parity levels.

The peak in US inflation has been getting pushed into the future for some time, and June was no exception.

The euro officially broke through parity levels against the dollar for the first time in almost twenty years on Wednesday afternoon, after another US inflation beat triggered a fresh bout of greenback strength.

Increasing concerns about the fragility of natural gas supplies to Europe, combined with good economic news from the US labor report, means that recession fears are now more sharply focused in Europe.

Boris Johnson’s resignation as UK Prime Minister provided room for a modest rally in the pound on Thursday, with attention in markets quickly turning to who could replace to outgoing Tory leader as the next PM.

The euro made another fresh march towards parity against the US dollar on Wednesday, as talk of recessions in the common bloc and around the world once again weighed on risk appetite.

The main news headline in the FX market on Tuesday was undoubtedly the sharp sell-off in risk assets against the safe-haven US dollar, as heightened global recession concerns sparked a fresh flight to safety.

A quiet start to the trading week brought a modest recovery in risk currencies against the safe-haven US dollar.

Last week was a fitting end to a brutal first half of the year for risk assets generally.

G10 currencies ended the week not far from where they had started it, as the news calendar turned relatively light and investors digested central bank communications.

Currency rankings last week were topped by an unusual winner, the Swiss franc. The Swiss National Bank joined the chorus of hawkish central bankers and surprised markets with a 50 basis point rate hike when no move was expected, sending the franc screaming higher against every other currency. Read our full expert analysis and what to expect from euro, dollar, sterling and this other currencies this week.