- EUR/USD is eying more upside towards a weekly high at 1.0600 amid a cheerful market mood.
- The US Treasury yields have extended their gains to near 3.49% as the Fed is set to hike the interest rate further.
- The ECB is looking to hike interest rates by 50 bps next week.
The EUR/USD pair climbed above the psychological hurdle of 1.0500 in the New York session and is aiming to sustain above the same ahead. The major currency pair is expected to kiss a weekly high around 1.0600 amid a significant improvement in the risk appetite of the market participants.
Meanwhile, the US Dollar Index (DXY) has slipped below the round-level cushion of 105.00 as investors have shrugged off uncertainty about a recession situation in the United States economy. S&P500 recovered sharply on Thursday after three consecutive bearish trading sessions, portraying a recovery in the risk-on profile. The 10-year US Treasury yields have extended their gains to near 3.49% as the Federal Reserve (Fed) is set to hike the interest rate next week.
As the inflation rate is extremely far from the desired rate of 2% and the Fed has yet not reached the neutral rate, continuation of policy tightening is highly expected. Analysts at Danske Bank see a further hike in interest rates by 50 basis points (bps) and a hawkish message from Fed chair Jerome Powell for CY2023. Also, the neutral rate is expected at 5.00-5.25%.
On Friday, investors will focus on the release of the five-year Consumer Inflation Expectation data. A de-anchored inflation data could accelerate recession fears in the US economy as it will force Fed policymakers to look more at a higher interest rate peak than current projections.
Meanwhile, Eurozone investors are shifting their focus toward the interest rate decision by the European Central Bank (ECB), which will be announced next week. Analysts at Rabobank think that the ECB is likely to raise the policy rate by 50 basis points in December but note that they are not fully discounting the possibility of a 75 bps hike. They have forecasted a terminal rate at 3%.
|Today last price||1.0557|
|Today Daily Change||0.0047|
|Today Daily Change %||0.45|
|Today daily open||1.051|
|Previous Daily High||1.055|
|Previous Daily Low||1.0443|
|Previous Weekly High||1.0545|
|Previous Weekly Low||1.029|
|Previous Monthly High||1.0497|
|Previous Monthly Low||0.973|
|Daily Fibonacci 38.2%||1.0509|
|Daily Fibonacci 61.8%||1.0484|
|Daily Pivot Point S1||1.0452|
|Daily Pivot Point S2||1.0394|
|Daily Pivot Point S3||1.0345|
|Daily Pivot Point R1||1.0559|
|Daily Pivot Point R2||1.0608|
|Daily Pivot Point R3||1.0665|
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.