EUR/USD pulls away from daily highs, clings to modest gains near 1.1830
- EUR/USD lost its traction in American session on Friday.
- US Dollar Index pared the majority of its daily losses.
- Core CPI in the US rose to 1.7% on a yearly basis in August.
The broad-based USD weakness during the first half of the day on Friday allowed the EUR/USD pair to climb to a daily high of 1.1874. However, the pair struggled to preserve its bullish momentum and erased a large portion of its gains. As of writing, EUR/USD was up only 0.15% on the day at 1.1831.
USD stays resilient against its rivals
The USD's valuation remains the primary driver of EUR/USD's movements ahead of the weekend. Following a sharp drop during Christine Lagarde's, President of the European Central Bank, press conference on Thursday, the US Dollar Index (DXY) closed in the positive territory supported by safe-haven flows.
Although the DXY edged lower during the European session on Friday, it turned flat near 93.35 in the last hour. In the absence of significant fundamental drivers, end-of-week flows could be providing a boost to the USD.
Earlier in the day, the US Bureau of Labor Statistics reported that inflation in the US, as measured by the core Consumer Price Index (CPI), rose to 1.7% in August and came in slightly higher than the market expectation of 1.6%.
On the other hand, ECB's chief economist Philip Lane said on Friday that the monetary policy has to remain very accommodative because "there's not enough monetary momentum in the inflation dynamic." Nevertheless, these comments reflected the same sentiment seen in the ECB's monetary policy statement and failed to trigger a market reaction.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
