EUR/USD Price Forecast – EUR/USD near 3-Week Low as US Treasury Yields Spike
EURUSD is currently on steep downward curve and the pair is moving around 1.1556 handle for majority of Asian market hours. The single currency trades narrowly but with a soft bias in Asia as intra-day rise in usd/yen has led to broad-based usd’s strength. Despite yesterday’s brief dip to session lows of 1.1537 in European morning on euro-negative comments by ECB’s Nowotny, buying interest above Tuesday’s 2-1/2 week trough at 1.1531 quickly lifted the pair n price ratcheted higher to 1.1600 in NY morning after mildly hawkish comments by ECB President Draghi, however, euro later pared intra-day gain n drifted lower in NY afternoon.
EURUSD Near Lows
Although euro’s rebound fm 1.1537 suggests choppy trading above 1.1531 low would continue, anticipated usd’s broad-based strength should pressure price, so selling euro on recovery is still favored. After the 3-day ECB Forum in Portugal which saw some heavy-weight speakers – central bankers & senior officials caused a stir in the market, we have Euro group meeting in Luxembourg later today where ECB’s Draghi will participate in the meeting too. At the same time, U.S Greenback hovered near 11-month high’s against a basket of currencies on Thursday supported by a rise in U.S. yields.
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Buoying the greenback, long-term Treasury yields bounced back from three-week lows, as risk aversion felt earlier in the week amid United States-China trade tensions eased for now. Treasury yields also were propped up by remarks from Federal Reserve Chairman Jerome Powell, who said on Wednesday that the U.S. central bank should continue with a gradual pace of rate increases. Remarks were not particularly ground breaking but it appears to have helped the dollar just as U.S. equities are recovering after being oversold on earlier risk aversion. On release front, US market will see release of Philadelphia Fed manufacturing Index and Initial Jobless Claims data. In European markets aside from euro group meeting investors will also look forward to SNB interest rate decision and monetary policy assessment in Switzerland trading hours.