EUR/USD slumps as US Dollar surges on strong US data, tests 1.1700

The Euro weakens for the second consecutive day as robust US data boosts the Greenback.
Jobless Claims, GDP and Durable Goods all beat expectations, signaling resilient growth.
Q2 Core PCE rises to 2.6%; focus now shifts to Friday’s August Core PCE inflation release.

Vishal Chaturvedi FXStreet

The Euro (EUR) extends its decline for the second day against the US Dollar (USD) on Thursday, weighed down by a string of upbeat US economic data that boosted the Greenback across the board.

At the time of writing, EUR/USD is hovering just above the 1.1700 psychological mark, down nearly 0.30% on the day, marking its weakest level since September 11, as traders react to the stronger-than-expected US economic release. Meanwhile, the US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major peers, extends its rebound, surging to 98.16, a 20-day high.

The latest round of US data releases painted a picture of resilient growth and sticky inflation, reinforcing the US Dollar’s bid. Initial Jobless Claims came in at 218K, beating expectations of 235K and down from 232K the previous week. At the same time, Q2 Gross Domestic Product (GDP) was revised higher to an annualized 3.8% from 3.3%, well above forecasts.

Durable Goods Orders also surprised to the upside, surging 2.9% in August, while orders ex-defense climbed 1.9%, pointing to firm business investment.

Meanwhile, the core Personal Consumption Expenditures (PCE) Price Index included in the Q2 GDP report rose slightly to 2.6% from 2.5%. However, investors are primarily focused on Friday’s August Core PCE inflation release, which will carry greater weight for monetary policy expectations.

The strong data mix complicates the Federal Reserve’s (Fed) cautious easing path. While markets still expect another rate cut in October, the scale of the monetary policy adjustment may be tempered if inflation remains sticky against the backdrop of robust growth.

Author

Vishal Chaturvedi

FXStreet

I am a macro-focused research analyst with over four years of experience covering forex and commodities market. I enjoy breaking down complex economic trends and turning them into clear, actionable insights that help traders stay ahead of the curve.

AUD/USD remains offered; supported by 0.7100

AUD/USD adds to Monday’s retracement, although it manages well to keep the trade above the 0.7100 yardstick ahead of the opening bell in Asia. Once again, the softer tone in spot follows decent gains in the Greenback amid rising bets for a Fed rate hike on Wednesday.

USD/JPY extends gains toward 155.00 amid USD resurgence

USD/JPY keeps pushing higher toward 155.00 early Tuesday, looking for more upside, as traders await the FOMC and BoJ meetings this week. Meanwhile, Fed rate-hike bets and oil-driven inflation risks keep US bond yields near multi-year highs, supporting the US Dollar and the pair. That said, a more hawkish repricing of the BoJ normalization path might continue to underpin the Japanese Yen and could limit USD/JPY's upside. .

Gold set to fall toward $4,000 as Warsh faces a Fed rate-hike dilemma

As the Federal Reserve monetary policy announcement approaches and the Middle East war intensifies, the US Dollar resumes its advance. Gold price posted a tepid attempt to recover its shine in early August, but with renewed USD demand, the bright metal faltered miserably and is now closer to the $4,000 mark than the encouraging $4,700 peak from a month ago.

Bitcoin pulls back as valuation ceilings hold while XAU weakness persists

Bitcoin (BTC) corrects alongside the broader cryptocurrency market on Tuesday as selling persists ahead of the United States (US) Federal Reserve (Fed) monetary policy decision. Market participants expect the central bank to raise interest rates to 3.75%-4.00% on Wednesday, potentially weighing on risk assets.

How Japan became the World's Banker and why that era may be ending

Japan's ultra-low interest rates helped finance trillions of dollars in global investments for more than a decade, making the Japanese Yen one of the world’s cheapest sources of funding. With the Bank of Japan expected to tighten policy again this week, that advantage may be entering a new phase. While most major economies raised interest rates, Japan remained the world's outlier.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.