EUR to Dollar is mixed as higher yields test, stock futures and Asian markets celebrate China’s homecoming.

Euro to Dollar (EURUSD) has broken a two-day slump but is struggling to sustain intraday gains. Euro(EURUSD) is hovering around 1.0870-60 as markets remain anxious ahead of crucial central bank meetings and data. The return of China and worries of a lower GDP estimate from Germany might add to the market’s hesitation. Mixed US data and the Fed’s receding hawkish leaning, in contrast to the European Central Bank’s (ECB) anticipation for further rate rises, keeping EURUSD in demand.

However, the US Dollar Index (DXY) is receiving bids to defend the 102.00 round number as after breaking a two-week decline US 10-year Treasury rates stay stronger around 3.51%. EURUSD is also supported by mixed US data and the market’s cautious optimism as China returns, resumed trade after one full week of the Lunar New Year vacations.

ECB’s hawkish concerns contrast with the Fed’s dovish increase to entice Euro to USD bidders

In terms of data, the Federal Reserve’s preferred inflation indicator, the Core Personal Consumption Expenditures (PCE) Price Index, met the market estimate of 4.4% YoY vs 4.7% before, while the monthly number climbed to 0.3% versus 0.2% predicted and previous readings. However Fed’s capacity to quell dovish fears, as well as the ECB’s ability to appease hawks, will be closely watched.

Prior to that, the US Bureau of Economic Analysis (BEA) released its initial estimate of the US fourth quarter (Q4) Gross Domestic Product, which showed an annualized growth rate of 2.9%, compared to 2.6% predicted and 3.2% before. In the same vein, Durable Goods Orders increased 5.6% in December, compared to the 2.5% market expectation and -1.7% higher revised previous. While reflecting the atmosphere, US Treasury bond rates continue to rise, while stock futures show minor losses.

A less active economic calendar in the US, Germany’s preliminary Q4 GDP might guide intraday traders. The initial readings of Germany’s fourth quarter (Q4) Gross Domestic Product (GDP), which are predicted to be 0.0% vs 0.4% before, will be critical to watch for immediate direction as the EURUSD bears continue their two-day downturn.