EUR/USD retreats to 1.1650 area, looks to end day modestly higher
- EUR/USD rose to a daily high of 1.1675 on Monday.
- ECB's Lagarde reiterates that they are monitoring exchange rate movements.
- US Dollar Index stays in red as market mood remains upbeat.
The EUR/USD pair lost more than 200 pips and posted its lowest weekly-close since early July at 1.1630. With the greenback struggling to preserve its strength on Monday, the pair staged a rebound and rose to a daily high of 1.1675 before losing its traction in the late American session. As of writing, the pair was up 0.25% on the day at 1.1658.
Earlier in the day, Christine Lagarde, President of the European Central Bank (ECB), told the EU Committee on Economic and Monetary Affairs that the external value of euro is having an impact on inflation and reiterated they continue to monitor movements in foreign exchange markets. Nevertheless, the shared currency largely ignored these comments.
DXY pulls away from lows, looks to close in red
On the other hand, the impressive gains seen in major European equity indexes caused the USD to lose interest as a safe-haven. Following last week's rally, the US Dollar Index (DXY) turned south and dropped to 94.15.
Although the DXY recovered a portion of its daily losses, it remains in the negative territory as Wall Street's main indexes remain on track to close the day sharply higher. At the moment, the S&P 500 Index is up 1.8% on the day and the DXY is losing 0.3% at 94.30.
On Tuesday, the European Commission will release the Consumer Confidence, Business Climate, Industrial Confidence and Services Sentiment data. Later in the day, Goods Trade Balance and the Conference Board's Consumer Confidence Index will be featured in the US economic docket.
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.
