EUR/USD drops past 1.0700 on upbeat US data, risk aversion
|- The EUR/USD slips to the 1.0660s region as robust US economic data, including an unexpected surge in April’s JOLTs report, bolstered the US Dollar, erasing previous gains.
- Easing inflation in Germany and France lessens the pressure on the ECB for further aggressive actions, contributing to the Euro’s downward trajectory.
- Upcoming economic events could further impact the currency pair, with EU members’ S&P Global PMIs and US job data in the spotlight.
EUR/USD stumbles past the 1.0700 mark erasing last Tuesday’s gains, and extends its fall toward the 1.0660s area after upbeat economic data from the United States (US) boosted the greenback. Earlier, Eurozone (EU) data showed that inflation is easing, hence the Euro’s (EUR) weakness. At the time of writing, the EUR/USD is trading at 1.0663m, down by more than 0.60%.
Risk aversion drives investors toward the greenback while easing inflation pressures in the EU cast a shadow on the Euro
Risk aversion has been the main driver since the beginning of the trading day. Further exacerbated by weak manufacturing activity in China and US debt-ceiling jitters, it triggered a flight to safety, namely the US Dollar (USD). Data-wise, the US economic agenda featured a surprising JOLTs report for April, with vacancies climbing the most in three months, cane at 10.1M, exceeding estimates of 9.375M, 300K more than March.
That triggered a re-pricing towards a more hawkish Federal Reserve (Fed), with odds at 69.8%, for a 25 bps rate hike. Therefore, the EUR/USD tumbled 30 pips, from around 1.0690, toward the 1.0660 area, Following the data release. As of writing, the EUR/USD continued to fall as the day advanced.
Across the pond, inflation in Germany came below estimates in May, easing off pressure on the ECB to continue its aggression cycle. German inflation rose by 6.1%, beneath forecasts of 6.5%, lower than April’s 7.2%. Earlier France revealed that prices slowed to 5.1%, from the 5.5% foresaw by analysts.
Upcoming events
The Eurozone economic data will reveal the EU’s members’ S&P Global PMIs on Thursday, alongside Retail Sales in Germany and the release of the Harmonised Index of Consumer Prices (HICP). On the US front, ISM and S&P Global PMIs and jobs data, with jobless claims and the ADP Report, would be revealed.
EUR/USD Technical Levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.