- EUR/USD drops on US tax reform news
- US-German 10-year yield spread widens, currently at levels last seen in May
EUR/USD fell more than 0.30 percent in Asia to low of 1.1807 as the US Senate approved budget in crucial step forward for Republican tax cuts.
The tax reform news pushed up the Treasury yields, resulting in widening of the US-German 10-year yield spread.
- The spread currently stands at 196 basis points; the highest since mid-May.
Ahead in the day, the USD may remain well bid on the back of the tax reform news. The Eurozone producer price index data and current account data are unlikely to move EUR pairs in a big way.
Kathy Lien from BK Asset Management writes, " Fed Chair Yellen will speak today, but not until markets close so most of the day will be spent guessing whether she will be more hawkish or dovish. Chances are there will be limited new position taking ahead of her lecture on monetary policy since the financial crisis."
EUR/USD Technical Levels
The spot was last seen trading around 1.1815 levels. James Chen from Forex.com shares his view on EUR/USD-
"EUR/USD is trading just under its 50-day moving average and between key price levels around the 1.1700 support area to the downside and the 1.1900 resistance area to the upside. The ECB decision next week will help dictate if and in what direction the euro may break this trading range. A likely scenario is that the central bank may advocate a more gradual tapering process over a longer period of time than expected, in part to avoid further euro strengthening. If this is the case, the euro could take a hit and EUR/USD could stumble, especially if Fed-driven dollar support resumes. In this event, a EUR/USD breakdown below 1.1700-area support could pressure the currency pair towards key downside targets around the 1.1600 and 1.1450 support areas."
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.