EUR/USD continues to trade in a tight band below 1.2100, US data awaited
|- EUR/USD is trading decisively below 1.2100 on Thursday.
- A slight correction in US Treasury yields aids the single currency.
- Risk-aversion on inflationary anxiety turns investors toward the US dollar.
Solid appreciation in the US dollar after the US inflation data, keeps the EUR/USD lagging below 1.2100 on Wednesday. The pair moves in the vicinity of the previous day’s low near 1.2070.
The US dollar index (DXY), which tracks the performance of the greenback against its six counterparts, rose to its highest level in the last three trading sessions. The DXY trades at 90.74 with a gain of 0.07%.
Concerns over rising inflationary pressures spooked the market participants as they rushed towards the greenback on its safe haven appeal. The US inflation data jumped in April to the highest level since September 2008, bolstering the narrative of the US central bank tightening its monetary policy sooner-than-expected.
Meanwhile, the US Treasury yields jumped to 1.70% following the smashing US CPI data, which came in at 4.2% YoY, beating the market expectations at 3.6%.
On the other hand, the euro gave up its gains, despite growing economic optimism in the Old Continent. The EU Commission has revised its GDP forecast for 2021 and 2022 backed by a surge in private consumption and investment.
As for now, the rising inflation pressure across regions primarily supports the demand for the US dollar.
Investors turn their attention towards the releases of the US Producer Price Index (PPI), and Initial Jobless Claims to seek fresh trading impetus.
EUR/USD Additional Levels
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