EUR/USD slides to fresh 2021 lows at 1.1524 courtesy of broad US dollar strength
- EUR/USD slides for the second day in a row, on the back of Us dollar strength.
- The US dollar index is trading at one and ½ year highs above 94.50, weigh on the EUR/USD pair.
- The market sentiment is downbeat, attributed to inflationary pressures and slower growth.
- Fed’s Bostic and Clarida support the start of the bond tapering by November.
The EUR/USD is sliding during the New York session, downward pressured 0.23%, trading at 1.1526 at the time of writing. The single currency is trading near the 2021 year lows.
The market sentiment stills in a risk-off environment, portrayed by US stock indices falling between 0.15% and 0.34%. However, safe-haven currencies like the Japanese yen and the Swiss franc are losing against most G8 currencies, probably on the back of the carry trade. In the meantime, the US Dollar Index, which tracks the greenback’s performance against a basket of six rivals, advances 0.18%, is at 94.54, reaching a new one and ½ yearly high.
Factors like Inflationary pressures mainly spurred by high energy prices, supply shortages, and a drop in consumer confidence keep investors at bay.
Germany ZEW of Economic Sentiment was worse than expected
On the macroeconomic front, Germany featured the ZEW Survey Economic Sentiment and Current Situation for October. The German Economic Sentiment rose to 22.3 lower than the 24 foreseen, whereas the Current Situation reading rose to 21.6, worse than the 29.5 expected, and trailed the September 31.9.
Across the pond, the JOLTS Job Openings for August dropped to 10.439M, less than the 10.925M estimated.
Fed’s Bostic and Clarida support the start of the bond tapering by the November meeting
Fed speakers have crossed the wires during the session. Raphael Bostic, President of the Federal Reserve in Atlanta, said that the slowdown in the US labor market should not derail the Fed’s taper timeline. He added, “would be comfortable starting tapering of asset purchase program in November.”
Meanwhile, the Federal Reserve Vice-Chairman Richard Clarida said that the bar for taper has all but met concerning the labor market. Further added, “if recovery remains on track, gradual tapering of asset purchases concluding middle of next year may soon be warranted.”
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Author
Christian Borjon Valencia
FXStreet
Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.
