• EUR/USD slips below 1.0700 as the Fed maintains hawkish guidance on interest rates.
• Fed’s Bowman sees no rate cuts this year.
• Investors will focus on the US core PCE and preliminary inflation data for the major economies of the Eurozone this week.

EUR/USD declines below the round-level support of 1.0700 in Wednesday’s European session. The major currency pair remains on the backfoot as the Euro’s near-term outlook weakens amid uncertainty over European Union (EU) legislative elections and growing speculation that the European Central Bank (ECB) could deliver subsequent rate cuts.

Fears over Eurozone elections intensified after French President Emmanuel Macron called for a snap election when his party suffered defeat in preliminary results from Marine Le Pen’s far-right National Rally (RN). The Euro could face more pressure if the shared continent sees a major policy shift.

Meanwhile, expectations for the ECB to deliver back-to-back rate cuts improve as the German economic outlook appears to be worsening due to weak demand prospects. Data showed on Monday that the German IFO Expectations index unexpectedly dropped to 89.0 from the estimates of 91.0 and the former release of 90.3 (downwardly revised from 90.4). On the data release, IFO President Clemens Fuest said, "The German economy is having difficulty overcoming stagnation."

This week, investors will focus on preliminary June inflation data for Spain, France, and Italy, which will be published on Friday.