- The dollar regains strength and cuts negative streak.
- EUR/USD gives up half of Tuesday’s gains.
- The round of employment data with the ADP continues in the US.
EUR/USD is falling on Wednesday, erasing half of Tuesday’s gains on a dollar rally in the market and a global decline in equities. Economic data confirm slowdown in Europe and US figures are coming.
Without being able to return to parity
The positive momentum of the EUR/USD was not enough to return above parity. After hitting 0.9999, the euro lost steam on Tuesday. Wednesday came around at one point, but only for the pullback to pick up steam.
The pair recently posted a daily low at 0.9909. This occurs before a strengthening of the dollar in the market. DXY rises 0.57%, supported by an upward rebound in Treasury bond yields. The 10-year bond yields 3.70%, down from 3.56% on Tuesday.
More signs of slowdown, US data to come
The final reading of the S&P Global Services PMI for the Eurozone was known, which showed a downward revision from 48.9 to 48.8 with respect to the preliminary figure. Germany’s was revised from 45.4 to 45. The numbers confirm the slowdown and are the lowest in more than a year.
The economic calendar for the rest of Wednesday is shown loaded with data from the US. In the first term will be the rADP private sector employment report for September, then will come foreign trade figures for August, the S&P Global PMI for the services sector and the ISM non-manufacturing for September. Raphael Bostic of the Atlanta Fed will speak on inflation in the second half of the American session.
The data could have a big impact on the market, through expectations of monetary policy. They will also serve as a preview of the official employment report on Friday, which is expected to show an increase in nonfarm payrolls of 250,000.
Traders will also continue to watch the bond market and stock markets closely. If the decline in stocks worsens, the dollar could be favored, especially if it is accompanied by a rise or stability in Treasury bond yields.
Technical levels
Source: Fx Street
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