EURUSD stays above 1.0500s maintaining a protective stance.
The EURUSD pair falls during Friday’s Asian session as it fails to build on the gains. Made the day before from the 1.0520 region, or from a one-week low. For the fourth consecutive day, spot prices exhibit a slight negative bias. But they are able to maintain a slight upper bound on the mid-1.0500s.
The USD is under pressure and benefits from an increase in US bond yields.
The US Dollar (USD) benefits from a little increase in US Treasury bond yields. Which, together with The European Central Bank’s (ECB) dovish outlook ends up being a major obstacle for the EURUSD pair. The Federal Reserve (Fed) is anticipated to maintain its hawkish posture. And keep rates higher for longer in the wake of the robust US economy. Despite indications that inflationary pressures in the US are lessening.
The US macro data, which was issued on Thursday. Confirmed the expectations. It was reported that the economy grew by 4.9% annualize pace in the third quarter. Which was more than the 4.2% growth expected. In addition, US durable goods orders surged by 4.7% in September. Above market forecasts as well. This keeps the EURUSD pair under pressure, along with the dovish outlook of the European Central Bank (ECB).
The EURUSD is down and the offered tone is exacerbated by the dovish view of the ECB.
Just as expected, then response to growing worries about eurozone development, the ECB chose to maintain rates at their current level, stopping an extraordinary string of 10 straight hikes in borrowing costs. ECB President Christine Lagarde did not rule out another rate hike during the press conference held after the meeting, but she did state that growth was expected to stay poor for the rest of the year as the effects of increased interest rates were becoming more widespread.
However, traders don’t appear to be willing to make strong bearish wagers on the EURUSD pair before the Fed’s favored inflation indicator, the US Core PCE Price Index, is released. The information will affect market expectations on the Fed’s potential rate-hike trajectory, which will fuel demand for the USD and give the major another boost. However, spot prices are still course to record small weekly losses.
