EUR / USD consolidates near 1.1700 as the US dollar falls

• The euro recovers towards 1.1700 against a weaker US dollar.
• The dollar plummets as US GDP data disappoints.
• EUR / USD rally to 1.1680 is expected to be short-lived – TDS.

The euro is up approximately 0.75% against the US dollar so far today to post its strongest daily performance in recent months. The pair EUR/USD it accelerated its recovery from the lows of the week at the 1.1580 area, to consolidate a few pips below 1.1700, helped by the general weakness of the USD.

The dollar sinks on bearish US GDP data.

The US dollar tumbled on Thursday, hit by disappointing Gross Domestic Product figures released by the US Department of Commerce. According to advanced estimates, US economic growth slowed to a 2% pace in the third quarter, from 6%, even below the expected pace of 2.7%. Supply chain restrictions and a sharp drop in consumer spending have been cited as the main reasons behind the economic slowdown.

Data for the third quarter represents the weakest performance since the second quarter of 2020, with economic activity hampered by the first COVID-19 restrictions, and has crushed hopes of a strong post-pandemic recovery.

Furthermore, the impact of the European Central Bank’s monetary policy statement on the euro has been muted. The ECB has stuck to the plan, with President Christine Lagarde boosting rate hike hopes until at least the end of 2022, as inflation pressures will ease over the course of next year, according to the Bank.

EUR / USD rally expected to be short-lived – TDS

Currency analysts at TD Securities view the current recovery of the euro as a corrective reaction with limited scope: “We think there is some risk that EUR / USD will test resistance at 1.1680, but extrapolating beyond seems like a big question. week before the Fed meeting where the gradual reduction will be announced (…) As much as we think there is scope to test the 1.1680 resistance, this should be short-lived ”.

Technical levels