Market Analytics and Considerations
Key notes
Following the most recent whipsaw, the EUR/USD is sliding below 1.0600 ahead of the European start. The US Dollar is recovering its losses, pulling the pair downward with it. The rise in US Treasury yields, spurred by the BoJ’s adjustment to its yield policies, is supporting the pair.
As the Bank of Japan (BOJ) changed its Yields Curve Control (YCC) by raising the upper bound to 0.50%, the US Dollar Index (DXY) saw a drop of more than 60 pips, resetting the intraday bottom near 103.95, at the latest. The ability of the Japanese central bank to issue further bonds may be considered along the same lines.
Nevertheless, the European Central Bank’s (ECB) substantially more tough stance should really have benefitted EUR/USD investors, according to recent statements from policymakers.
Nonetheless, the US Dollar’s downward movement is constrained by higher US Treasury rates and pessimistic US stock futures, which in turn provides a bottom for the EUR/USD pricing. As a result, investors of EUR/USD should focus on risk drivers for new momentum.
However, in order to predict urgent actions, the US Building Permits and Housing Starts for the specified month will be released after Germany’s Producers Price Index (PPI) for November, which is anticipated to decline by 2.6% YoY from the previous -4.2%.
