EUR/USD struggles near 1.0300 as dollar recovers ahead of US data
|- EUR/USD is back in the red as the US dollar extends the overnight recovery.
- US Treasury yields hold near multi-week top amid hawkish Fed commentary.
- US Preliminary UoM Consumer Sentiment data eyed for fresh Fed rate hike pricing.
EUR/USD is trading close to the 1.0300 mark, struggling to find demand amid an extended recovery in the US dollar across the board.
The market mood remains mixed so far this Friday, as investors reassess the Fed rate hike expectations amid easing US consumer and factory-gate inflation while officials at the world’s most powerful central bank continue to back big rate increases to tame stubbornly high inflation.
Fed expectations and US data in focus
San Francisco Fed Mary Daly said early Friday, a 50 bps rate hike in September "makes sense" given the recent economic data including on inflation but added that she is open to a bigger rate hike if data warrants. Money markets are now pricing in a 65% chance of a 50 bps hike in September and a 35% chance of a 75 bps lift-off.
Investors are quick to buy into the dips in the US dollar amid hopes that the Fed will continue on its rate hike journey, limiting the upside attempts in the pair. The US Treasury yields also hold onto the recent upswing, with the benchmark 10-year rates hovering near three-week highs of 2.902%.
Meanwhile, markets fully price in a 50 bps ECB rate hike in September but increasing odds of a recession in the euro area, in the wake of the deepening gas crisis, keep hurting EUR bulls.
Attention now turns towards the Eurozone Industrial Production and Current Account data for fresh trading impetus. The main event risk, however, remains the US UoM Preliminary Consumer Sentiment Index due later in the NA for fresh re-pricing of the Fed rate hike odds and its eventual impact on the dollar valuations.
EUR/USD technical levels to consider
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.