- EUR/USD continues to push higher in American session.
- US Dollar Index extends daily slide, closes in on 90.00.
- Retreating US Treasury bond yields weigh on USD.
The EUR/USD pair preserved its bullish momentum in the second half of the day and rose to its highest level in a week at 1.2161. As of writing, the pair was up 0.35% on the day at 1.2159.
Renewed USD weakness lifts EUR/USD
The USD's market valuation remains the primary driver of EUR/USD's movements at the start of the week. The US Dollar Index (DXY) stayed relatively quiet around 90.30 during the European trading hours but lost its traction in the early American session.
In the absence of significant fundamental drivers, the negative shift seen in the US treasury bond yields seems to be hurting the greenback. At the moment, the 10-year US T-bond yield, which gained as much as 3% earlier in the day, is posting losses at 1.347% and the DXY is down 0.35% at 90.03.
The data from the US showed on Monday that the Chicago Fed National Activity Index improved to 0.66 in January from 0.41 in December and the Dallas Fed Manufacturing Business Index advanced to 17 in February from 7. Nevertheless, these figures had little to no impact on the USD's performance against its rivals.
Meanwhile, Christine Lagarde, President of the European Central Bank, reiterated on Monday that the ECB will continue to support all sectors of the economy by preserving favourable financing over the pandemic period.
On Tuesday, Eurostats' inflation report will be watched closely by market participants. The core Consumer Price Index (CPI) is expected to stay unchanged at 1.4% on a yearly basis in January and a lower-than-expected reading could hurt the shared currency.
Technical levels to watch for
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