EUR/USD remains pressured below 1.1600 amid USD rebound, dovish ECB
- EUR/USD starts the fresh trading week on a lower note.
- US Dollar Index regains 94.00 amid risk aversion, firmer yields
- Dovish ECB, Fed tapering, mixed Eurozone data back the euro underperformance.
The EUR/USD pair remains subdued in the Asian session on Monday. The pair opens up near 1.1600 but fails to preserve the upside momentum. At the time of writing, EUR/USD is trading at 1.1587, down 0.09%.
The greenback rises above 94.00, following the higher US 10-year benchmark Treasury yields. Higher inflation worries over rising energy prices and upbeat US Retail sales data puss bond yields on the higher side.
Investors are bracing up for the Fed’s tapering as soon as November whereas the European Central Bank (ECB) dovish stance weighs on the shared currency. The risk sentiment deteriorates following the disappointing Chinese GDP data. It is worth noting that, S&P 500 Futures are trading at 4,461, down 0.03% for the day.
The ECB President Christine Lagarde said that the central bank will continue to aid the eurozone economy as the fallout from the pandemic lingers, adding to her previous comments on the inflation as “ largely transitory”. In addition to that, ECB Governing Council member Klass Knot shrugged off the inflationary fear and the prospects of the near-term interest rate hike scenario.
On the economic data front, the \Eurozone Industrial Output declined by 1.6% in August, following a revised 1.4% growth in July.
As for now, traders are waiting for the US Industrial Production Data, US Fed’s Quarles Speech for fresh trading impetus.
EUR/USD technical levels
Author
Rekha Chauhan
Independent Analyst
Rekha Chauhan has been working as a content writer and research analyst in the forex and equity market domain for over two years.
