EUR/USD steadies around 1.2070 following sharp decline
|- EUR/USD remains on track to close the day deep in the negative territory.
- Annual CPI inflation in US jumped to 4.2% in April.
- US Dollar Index gains more than 0.5% on Wednesday.
The EUR/USD pair spent the first half of the day moving sideways in a relatively tight range above 1.2100 on Wednesday but came under strong pressure during the American trading hours. As of writing, the pair, which touched a daily low of 1.2066, was down 0.58% on a daily basis at 1.2075.
USD gathers strength on the back of rising T-bond yields
The highly-anticipated inflation data from the US showed on Wednesday that the Consumer Price Index (CPI) in April jumped to 4.2% on a yearly basis from 2.6% in March. This reading surpassed the market expectation of 3.6%. Moreover, the Core CPI, which excludes volatile food and energy prices, climbed to 3% from 1.6%, compared to analysts' estimate of 2.3%.
The US Treasury bond yields surged higher after this report and provided a boost to the greenback. With the benchmark 10-year US T-bond yield rising more than 3% on the day, the US Dollar Index is up 0.62% at 90.73.
There won't be any macroeconomic data releases featured in the European economic docket on Thursday and the USD's market valuation is likely to continue to drive EUR/USD's action. In the second half of the day, the Producer Price Index (PPI) data from the US will be looked upon for fresh impetus. A similarly strong PPI reading is likely to help the USD continue to outperform its rivals. The US Department of Labor will release its weekly Initial Jobless Claims data as well.
Technical levels to watch for
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.