EUR/USD steadies around 1.1750, on track to snap four-day losing streak
- EUR/USD reversed its direction after dropping below 1.1700.
- FOMC-inspired US Dollar Index rally lost momentum on Thursday.
- Wall Street's main indexes are posting impressive gains.
Following Wednesday's sharp decline, the EUR/USD pair spent the first half of the day moving sideways below 1.1700. With the greenback coming under renewed selling pressure during the American session, the pair gained traction and reached a daily high of 1.1751. As of writing, EUR/USD was up 0.5% on the day at 1.1745.
DXY reverses course
The FOMC's hawkish policy outlook seen in the Summary of Economic Projections and Chairman Jerome Powell's comments about asset tapering starting as soon as the next meeting provided a boost to the USD on Wednesday. Reflecting the broad-based USD strength, the US Dollar Index (DXY) climbed to its highest level in more than a month at 93.52.
However, the positive shift witnessed in market sentiment caused the DXY to push lower in the second half of the day. Currently, the index is losing 0.45% at 93.03. Supported by heightened hopes about the Chinese real-estate giant Evergrande avoiding a default, the S&P 500 Index is rising 1.45% on the day at 4,459.
Earlier in the day, the data from the US revealed that the weekly Initial Jobless Claims rose to 351,000 from 335,000 previously. Additionally, the Markit Manufacturing PMI declined to 60.5 in September's flash estimate while the Services PMI edged lower to 54.4 from 55.1. Nevertheless, these disappointing readings had little to no impact on risk perception.
On Friday, IFO Business Climate and Current Assessment data from Germany will be looked upon for fresh impetus. Later in the day, the August New Home Sales report 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.
