EURUSD is under pressure ahead of US data.
After two days of gains, the EURUSD is trading marginally down during the Asian session on Friday, at 1.0540. However, the pair found support on the upswing, a move that might be connected to the US Dollar (USD) correction following a reduction in US Bond rates.
Germany’s trade surplus fell to €16.6 billion in August from €17.7 billion in July, above the market’s forecast of €15.0 billion.
ECB is projected to retain its current interest rates, putting pressure on the EURUSD.
The European Central Bank (ECB) is anticipated to keep its current interest rate unchanged. In the forthcoming meeting later this month, rates will be set at 4.50%. According to ECB Governing Council member Mario Centeno’s insights on Wednesday, inflation in the Eurozone is dropping faster than it was rising. This discovery suggests that the rate cycle may have come to an end under the current conditions.
The US Dollar Index (DXY) has recovered and is currently trading at 106.50. The US dollar has dropped after reaching an 11-month high earlier this week.
The Fed’s monetary policy claim is adding to the firmness of US bond rates.
US Treasury rates are stable, remaining near multi-year highs. Market investors are being cautious owing to the US Federal Reserve’s (Fed) aggressive attitude on interest rate trajectory. The 10-year US Treasury yield is still around 4.70%, close to its all-time high. Initial Jobless Claims in the United States increased to 207K for the week ending September 29 from 205K the prior week. Surprisingly, this exceeded the market forecast of 210K.
US Challenger Job Cuts fell considerably in September, from 75.151K to 47.457K. On Friday, market players will be looking for the publication of US Nonfarm Payrolls and Average Hourly Earnings. These results will reaffirm the tight labor market, and positive numbers might cause the USD to strengthen and increase volatility in the bond market.
