EUR/USD: Domestic news and overall environment continue to point to weakness – ING

FXStreet Insights Team FXStreet

EUR/USD is enjoying a relief rally to 1.0600. Economists at ING analyze the pair’s outlook.

EUR/USD downside risks could extend to the 1.00/1.02 area

Domestic news and the overall environment continue to point to EUR/USD weakness, and our rates team sees more upside risks for back-end UST yields, which could pave the way for a further short-term depreciation in EUR/USD.

Should we see a material deterioration in the Italian bond market – and barring a swift reaction by the ECB to calm investors – EUR/USD downside risks would extend to the 1.00/1.02 area in an environment where US bonds remain under pressure on the back of solid US data and the Federal Reserve remains hawkish.

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FXStreet Insights Team

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EUR/USD remains on the back foot near 1.1740 post-US PMIs

EUR/USD is edging lower on Friday, giving back part of Thursday’s sharp rebound and drifting back toward the 1.1740 area amid the lack of clear direction around the US Dollar, which remains apathetic following the lower-than-expected results from flash PMIs in January.

GBP/USD keeps the firm tone around 1.3530

GBP/USD is building on its solid weekly advance and is pushing toward the 1.3530 area, or two-week highs, on the back of a modest retracement in the Greenback. In the meantime, strong UK retail sales figures and upbeat preliminary PMIs are reinforcing Cable’s gains as Friday’s session unfolds.

Gold trims gains, back to $4,950

Gold prices surged to a fresh record near $4,970 per troy ounce earlier on Friday, keeping the door open for a potential test of the $5,000 mark sooner rather than later. Mixed price action in the US Dollar, alongside falling Treasury yields across the curve, is underpinning the precious metal’s rally into the end of the week.