• EUR/USD remains on the foot at the highest levels in seven weeks despite recent inaction after refreshing multi-day top.
• Multiple ECB hawks cite inflation pressure to emphasize the need for higher rates.
• Fed Powell failed to impress markets with repeated remarks in bi-annual testimony.
• Fears of German recession, US-China tussles prod Euro buyers amid a likely sluggish day ahead.

EUR/USD refreshes the highest level since May 11 as it rises to 1.0997 during early Thursday, after snapping a three-day downtrend with the biggest daily jump in a week the previous day. That said, the Euro pair’s latest gains could be linked to the market’s appraisal of the hawkish bias at the European Central Bank (ECB), as well as a dull acceptance of the otherwise upbeat statements from Federal Reserve (Fed) Chairman Jerome Powell’s bi-annual testimony.

Reuters quote comments from Bundesbank chief Joachim Nagel, ECB policymaker Francois Villeroy de Galhau and ECB board member Isabel Schnabel to suggest hopes of more rate hikes from the region’s central bank by citing the inflation woes. “Eurozone inflation is stubborn and may require a protracted period of high-interest rates to contain, partly due to an exceptionally tight labor market, the European Central Bank's (ECB) two German policymakers said on Wednesday,” said the news.

It’s worth noting, however, that ECB policymaker Peter Kazimir said on Wednesday that he is not certain whether the central bank will continue its rate hike cycle in September.

Also challenging the Euro bulls are statements from Germany’s IFO Institute as it warned that the German recession will be sharper than expected while also saying that the economy is only very slowly working its way out of the recession.

On the other hand, Fed Chair Powell’s testimony to the US House Financial Services Committee failed to impress the US Dollar bulls as the greenback printed the first daily loss in four after the key event. The reason could be linked to the absence of any fresh comments, as well as contrasting statements from other Fed Officials. That said, the US Dollar Index (DXY) dropped the most in a week the previous day, poking the 102.00 level by the press time.

The reason could be linked to comments from Federal Reserve Bank of Chicago President Austan Goolsbee prod US Treasury yields and triggered the US Dollar weakness as he said that the decision last week was a close call for him. The central bank has to “do more sniffing” before another rate hike, Fed’s Goolsbee added.

Elsewhere, fears of the global economic slowdown and escalating US-China tension, after Beijing hits back at US President Joe Biden’s criticism of its Chinese counterpart, prod the EUR/USD pair buyers.

Amid these plays, Wall Street closed in the negative zone for the third consecutive day while the US Treasury bond yields remained intact after a volatile day. It should be noted that the S&P500 Futures remain directionless in Asia amid holidays in China and Hong Kong.

Looking ahead, Eurozone Consumer Confidence and the second-tier US data will decorate the calendar. Though, major attention will be given to a slew of central bank announcements from the UK, Indonesia, Switzerland and Mexico for clear directions. Additionally important will be the second round of Fed Chair Powell’s testimony, this time before the Senate Banking Committee