EUR/USD bounces sharply and turns positive as US Dollar tumbles
|- DXY reverses dramatically from weekly highs and drops into negative territory.
- Euro remains among worst performers but erased losses versus US Dollar.
The EUR/USD pair reversed significantly over the last two hours and erased daily losses. The euro went from trading at the lowest since May 2017 to print fresh daily highs in a few minutes.
After the beginning of the American session, EUR/USD bottomed at 1.1106, slightly below the previous year-to-date low seen at 1.1110. It started to rebound and accelerated to the upside following the release of US economic data. It climbed more than 50 pips from the lows and printed a fresh daily high at 1.1166.
As of writing trades at 1.1160, marginally positive for the day. A consolation around current level would be a positive signal for the euro and could point that a short-term bottom has been reached today.
The PMI report showed that the Flash US Composite Output Index dropped to at 50.9, a 6-month low, the Service Index fell to the lowest in 39 months at 50.9 and the manufacturing declined to 50.6, lowest in nine years. Also, the new home sales report showed lower-than-expected numbers, favoring the reversal in the US Dollar.
Despite the change in the USD daily trend, equity prices are consolidating heavy losses in Europe and Wall Street. The DOW JONES is falling 1.35% and the NASDAQ 1.50%. Among currencies, the Yen and the Swiss Franc are the top performers. Gold is also rising sharply, reflecting the demand for safe-haven assets.
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