- EUR/USD to finish the week above 1.0600 after hitting a weekly low of 1.0533.
- A risk-on impulse and falling UST bond yields are a headwind for the US Dollar.
- US ISM Non-Manufacturing data showed the US economy remains resilient.
EUR/USD reversed its course and is set to finish the week with gains of more than 0.80% on a softer US Dollar (USD) amidst speculations that the US Federal Reserve (Fed) would not hike rates beyond what money market futures expect. The EUR/USD exchanges hands at 1.0635 after hitting a daily low at 1.0588.
EUR/USD trimmed Wednesday’s losses as investors downplayed hawkish Fed commentary
US equities are set to finish the week with gains. The US Dollar Index (DXY), a measure of the buck’s value vs. a basket of peers, slides from a two-and-a-half-month high down to 104.526 after US data reaffirmed a solid economic status in the United States (US).
Business activity in the US improved, as shown by the US ISM Non-Manufacturing PMI for February was 55.1, a tick lower than the previous month’s 55.2, but exceeded expectations of 54.5, indicating that business activity is still strong. The prices index subcomponent, sought by investors for clues about inflation, jumped to 65.5, exceeding estimates of 64.5 but trailing Janiary’s data.
Meanwhile, Federal Reserve officials crossed newswires, with Fed Governor Michelle Bowman and Dallas Fed President Lorie Logan did not comment on monetary policy. The Boston Fed President Susan Collins commented that inflation remains too high and added that
Aside from this, the Eurozone (EU) revealed S&P Global Services and Composite PMIs came above previous readings. Meanwhile, inflationary figures announced on Thursday came below last month’s data but above estimates, a reason for the ECB to continue to hike interest rates.
Even though figures were higher than expected, investors had already priced in a 50 bps rate hike by the European Central Bank (ECB) as announced by its President Christine Lagarde in its last meeting presser. However, recent data have ECB policymakers split on what signal the bank should send to the markets.
EUR/USD Technical levels
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
EUR/USD remains on the back foot below 1.0800
EUR/USD remains on the defensive below 1.0800, as it consolidates weekly gains heading into Friday’s European session. The pair takes cues from the market’s sluggish momentum amid a light calendar and repositioning ahead of next week’s top-tier EU/ US events.
GBP/USD keeps range around 1.2550 amid quiet markets
GBP/USD is keeping its range play intact at around 1.2550 in the European morning this Friday. The US Dollar is licking its wounds following the US jobs data-led steep sell-off. Markets stay cautious, anticipating the end-of-the-week flows and position adjustments.
Gold could recapture 21 DMA resistance if RSI turns bullish
Gold price is consolidating Thursday’s impressive rebound from near $1,940, having yo-yoed within a $30 weekly range. Gold price could see a range breakout on Friday should the end-of-the-week flows trigger intense volatility.
Binance.US to suspend USD deposits, citing aggressive and intimidating tactics by the SEC
BinanceUS, the American arm of Binance.com, has indicated plans to suspend USD deposits, noting that its banking partners would do the same for withdrawal beginning June 13.
Eurozone in recession, but why?
It appears that a technical recession has indeed materialized, although the statistical offices took some time to officially declare it. The slight decline of 0.1% in both the fourth and first quarters is rather minimal.