- A weaker US dollar propels EUR / USD further above 1.1800.
- Positive risk sentiment in the markets favors the euro.
- DXY is suffering the worst drop in weeks, even as US yields rebound.
The EUR/USD It broke above 1.1800 and rose to 1.1816, reaching the highest level since Thursday. It is moving around 1.1810 with a positive intraday bias amid a weaker US Dollar across the board.
Stocks rally, dollar falls at the start of Fed week
US economic data disappointed expectations. New home sales fell to 676,000 (annual rate), below the 800,000 expected. The Dallas Fed Manufacturing Companies Index for July fell from 31.1 to 27.3. The numbers had no impact on the dollar.
The improvement in risk sentiment could have weakened the US dollar. The Nasdaq Composite Index hit a new high while the Dow Jones was down 0.21%, but the tone is better than pre-market. US yields moved higher without helping the dollar. The 10-year yield is back to 1.27% after hitting the previous 1.22%.
The fall of the dollar is driving the recovery of the EUR / USD. At the same time, the EUR / GBP hit a new daily low below 0.8540 and the DXY fell to 92.55. The index is down 0.35%, having the worst day since July 14.
So far, it’s been a quiet start ahead of this week’s Fed meeting. On Wednesday, the central bank will release its statement. Most analysts expect limited changes to the statement and probably some mention of what the economic recovery has accomplished. Powell could talk about some discussions about QE taper options.