EUR steadies on as-expected IFO business sentiment figures – Scotiabank

FXStreet Insights Team FXStreet

The Euro (EUR) is steady, up modest 0.2% against the US Dollar (USD) as it attempts a tentative recovery from last Friday’s low, Scotiabank's FX strategists Shaun Osborne and Eric Theoret report, Scotiabank's FX strategists Shaun Osborne and Eric Theoret report.

The broader bull trend appears to have reumed

"German IFO business sentiment figures were largely in line with expectations and offered little change from the prior month. This week’s highlight will be the preliminary German CPI figures scheduled for Friday."

"The EUR appears to be once again showing signs of a disconnection from its fundamentals, with yield spreads pushing to fresh highs at levels last seen in September 2024. Measures of sentiment are marginally bullish, with three month risk reversals pricing a slight premium for protection against EUR strength."

"The EUR most recent pullback appears to have found support around 1.1500 and the latest gains are hinting to a resumption of the broader bull trend. The RSI remains bearish below 50 but it has recovered from near-oversold levels in early November and its latest pullback that barely dipped below 40. We are neutral looking to a near-term range bound between 1.1500 and 1.1600."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD holds range below 1.3650 amid Iran risks

GBP/USD extends its sideways consolidative price move for the second straight day and trades below 1.3650 in Tuesday's European session. The US Dollar is looking to build on its modest recovery amid US sanctions on Iran, acting as a headwind for the pair. The lack of follow-through selling warrants some caution for bearish traders.

EUR/USD struggles near 1.1650 as USD recovers amid Mideast woes

EUR/USD is struggling to gain traction, while trading near 1.1650 in European trading on Tuesday. The pair fails to find support amid a modest US Dollar recovery as rising oil prices, elevated bond yields, and escalating Middle East tensions fuel risk-off trades. Upbeat Germany IFO Survey fails to inspire Euro bulls.

Gold remains depressed below $4,650 on firmer USD, Fed risks, and Middle East tensions

Gold remains on the back foot below $4,650 through the first half of the European session. However, the lack of follow-through selling warrants caution before positioning for an extension of the intraday retracement slide from the $4,700 neighborhood, or the highest level since May 14, touched earlier this Tuesday. The US Dollar is seen building on its recovery from a three-month low as inflation risks stemming from volatile energy prices keep bets for at least one interest rate hike by the US Federal Reserve on the table.

Bitcoin tops $80,000 as US Treasury fights high yields – AERO, VIRTUAL rally

Bitcoin extends gains above $80,000 as broader market risk-on sentiment persists. The scarce asset could extend its rally as the US Treasury combats high yields in the long-dated bond market, with further interventions on the horizon. Aerodrome Finance (AERO) and Virtuals Protocol (VIRTUAL) emerged as top performers over the last 24 hours.

The forex market is switching to a ‘debasement trade’

The US dollar has stabilised near three-month lows thanks to a rapid recovery in Treasury bond yields. Yields on 30-year bonds are returning to the levels seen following the Treasury’s announcement that it was increasing the minimum purchase volume to $4 billion. The greenback got support from falling stock indices, the continued rally in Brent crude, and positive signals from the US economy.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.