EUR/USD refreshes daily high above 1.1850 ahead of EU data
- EUR/USD continues to notch higher on Thursday in the Asian session
- US Treasury yields undermine the demand for the US dollar.
- US Dollar Index retreats towards a two-week low on Powell’s comments.
The selling tone surrounding the US dollar amid falling US Treasury yields keeps EUR/USD on the verge of daily gains. After touching the low of 1.1753, the pair continues to march higher since the beginning of the week
At the time of writing, the EUR/USD is trading at 1.1855, up 0.11% on the day.
The successive gains in EUR/USD were primarily credited to the downbeat performance of the US dollar. The US Dollar Index (DXY), which tracks the performance of the greenback against the six majors, remained on the backfoot amid falling US Treasury yields. The tug of war between growth and inflationary concerns took a toll on Fed’s latest monetary policy’s meeting.
The Fed left the target range for its federal rates unchanged at 0-0.25% and assets purchasing also remained unchanged at the current pace of $120 billion.
In addition to that, Fed Chair Jerome Powell cautioned that although there has been substantial improvement in the economy still there is a way to go before the central bank would adjust its ultra-accommodative policy, which also kept investors away from the US dollar.
On the other hand, the single currency is boosted by the upbeat economic data and general risk-on mood. The IHS Markit Eurozone Composite PMI rose to 60.6 in June from 59.5 in the previous month.
Being said, the stronger economic data in the US and Eurozone improved the risk appetite and drove market participants towards riskier assets. The risk-on market sentiment favors EUR/USD upside gains.
The important data on the economic calendar to look out for would be the EURO Unemployment Rate, Consumer Confidence data, and German Haromized Inflation Rate. The US Gross Domestic Product (GDP) and Initial Jobless Claims would also be on the trader’s radar.
EUR/USD additional levels