- EUR/USD extends its daily decline in the American session.
- The aggressive comments from the Fed help the USD continue to gain strength.
- The US dollar index extends its recovery to 105.00 on Friday.
The EUR/USD it extended its decline after falling below 1.0500 and hit a fresh daily low below 1.0450. The dollar continues to gain strength and the pair seems to close the second week in a row in negative territory.
DXY rises to 105.00
After a two-day drop, the US Dollar Index (DXY), which tracks the dollar against a basket of six major rivals, reversed direction and erased its weekly losses. At the time of writing this report, DXY is up more than 1% on the day and trades at 105.00.
Market risk aversion, rising US Treasury yields and hawkish Federal Reserve comments fueled the dollar’s rally ahead of the weekend.
Minneapolis Fed President Niel Kashkari said on Friday he may support another 75 basis point rate hike in July, adding that they could raise rates higher than currently expected if inflation moves higher. The yield on the 10-year US Treasury bond last rose more than 2% on the day to 3.27%.
Meanwhile, data from the United States showed that industrial production grew by 0.2% monthly in May. This data disappointed the market expectations of a 0.4% increase and did not allow the market sentiment to remain optimistic.
Technical levels
Source: Fx Street
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