- EUR/USD loses traction amid the firmer US dollar and upbeat US data.
- German Consumer Sentiment fell to -26.5 in October from -25.6 in September.
- US Durable Goods Orders improved in August, climbing 0.2% m/m vs. -5.6% prior.
- Traders will monitor Eurozone CPI, US GDP due later on Thursday.
The EUR/USD pair loses momentum around 1.0500 during the early Asian session on Thursday. The selling pressure of the major pair is supported by the firmer US Dollar (USD), higher US economic data, and higher Treasury yield. EUR/USD currently trades near 1.0512, gaining 0.09% for the day.
Meanwhile, the US Dollar Index (DXY), a measure of the value of the USD relative to a basket of foreign currencies, climbs to 106.60, the highest since November whereas US Treasury yields edge higher with the 10-year Treasury yield settled at 4.618%, its highest level since 2007.
The downbeat Eurozone economic data exert some selling pressure on the Euro and acts as a headwind for the EUR/USD pair. German Consumer Sentiment revealed by GfK fell to -26.5 in October from -25.6 in September. Furthermore, Spain and Germany will publish preliminary September Consumer Price Index (CPI) numbers. Spanish annual inflation is expected to rise, while German inflation will likely decline. These initial inflation figures are crucial for shaping monetary policy expectations and can impact the markets.
Across the pond, the US Census Bureau revealed on Wednesday that US Durable Goods Orders improved in August, climbing 0.2% m/m from the previous reading's 5.6% fall, compared to estimates for a 0.5% m/m drop. Furthermore, Durable Goods Orders Excluding Transportation rose by 0.4% m/m, above the 0.1% gain anticipated. Core capital goods orders grew 0.9% from the previous month's figure of 0.4%, above the market estimate of 0%. Following the better-than-expected US data, the Greenback gains traction across the board, acting as a headwind for the EUR/USD pair.
Markets were driven by risk-aversion as investors weighed higher for longer rates narrative against growth risks from the possibility of an imminent government shutdown in the US. Traders will monitor Federal Reserve (Fed) Chair Jerome Powell's address this week for fresh catalysts. The less hawkish tone of officials may limit the USD's upside and lift the Euro.
Looking ahead, market players await the preliminary Spanish and German inflation data for September. Also, the Eurozone's Consumer and Business Confidence data will be released on Thursday. On the US docket, the US weekly Jobless Claims report, the third revision of Gross Domestic Product (GDP) for the second quarter and Pending Home Sales data will be released on Thursday. The attention will shift to the US Core Personal Consumption Expenditure (PCE) Price Index on Friday. The annual figure is expected to ease from 4.2% to 3.9%. Traders will take cues from the data and find a clear direction of the EUR/USD pair.
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.
Recommended content
Editors’ Picks
AUD/USD pulls back due to an upward correction in the US Dollar
AUD/USD is retracing its recent gains on Friday, following a rally on Thursday. The rally was propelled by a decline in the US Dollar as weak US Initial Jobless Claims indicated a more dovish outlook for the Federal Reserve. This helped offset pressure on the pair resulting from the RBA's less hawkish stance.
USD/JPY holds positive ground around 155.50 on Fed’s hawkish comment
USD/JPY trades on a stronger note around 155.50 on Friday during the Asian trading hours. The renewed US Dollar demand lifts the pair. Nonetheless, the verbal intervention and the hawkish comment from the Bank of Japan’s Governor Kazuo Ueda might cap the downside of the Japanese Yen for the time being.
Gold price extends the rally despite hawkish Fedspeak
Gold price gains momentum on Friday despite the modest rebound in US Dollar. The yellow metal edges higher as many economists expect a weakening labor market could prompt the Federal Reserve to cut interest rates sooner than currently expected to stimulate economic growth.
Ethereum waiting on a bullish trigger, Consensys CEO takes a jab at the SEC
Ethereum co-founder alleges that the SEC aims to stifle innovation through its enforcement actions against Ethereum-related companies. Grayscale CEO says he's optimistic the SEC would approve its spot ETH ETF application.
Rate cut optimism fuelled by higher US jobless claims
With Federal Reserve policy acting as the primary driver of investor sentiment in 2024, renewed optimism surrounding the possibility of rate cuts has propelled the Dow to its most significant rally since December. Additionally, the S&P 500 surged past the critical 5,200-point mark.