EUR/USD drops below 1.0450 as dollar recovery picks up steam
|- EUR/USD extended its daily slide in the American session.
- Hawkish Fed commentary helps the greenback continue to gather strength.
- US Dollar Index extends recovery to 105.00 on Friday.
EUR/USD extended its slide after dropping below 1.0500 and touched a fresh daily low below 1.0450. As the dollar continues to gather strength, the pair looks to close the second straight week in negative territory.
DXY rises to 105.00
Following a two-day drop, the US Dollar Index (DXY), which tracks the dollar's performance against a basket of six major rivals, reversed its direction and erased its weekly losses. At the time of press, the DXY was up more than 1% on the day at 105.00.
The risk-averse market environment, rising US Treasury bond yields and hawkish Fed commentary fuel the dollar's rally ahead of the weekend.
Minneapolis Fed President Niel Kashkari said on Friday that he could support another 75 basis points rate hike in July and added that they could raise rates beyond what is currently forecast if inflation were to drift higher. The benchmark 10-year US Treasury bond yield was last seen rising more than 2% on the day at 3.27%.
Meanwhile, the data from the US showed that Industrial Production expanded by 0.2% on a monthly basis in May. This print missed the market expectation for an increase of 0.4% and didn't allow the market mood to remain upbeat.
Technical levels to watch for
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