EUR / USD falls to multi-month lows below 1.1800 as USD regains strength

  • EUR / USD came under bearish pressure at the end of the US session.
  • The US dollar index rises above 92.70 on rising US Treasury yields.
  • The annual CPI in the United States jumped to 5.4% in June.

The pair EUR/USD it fell below 1.1800 in the early hours of the US session following the US inflation report, but achieved a recovery towards 1.1840. With the dollar regaining its strength in the last hour, the pair turned south once again and was last seen trading at its lowest level since early April, shedding 0.66% on the day at 1.1782.

The USD capitalizes on rising US Treasury yields.

Earlier in the day, the US Bureau of Labor Statistics reported that inflation in the US, as measured by the Consumer Price Index (CPI), rose to 5.4% annually in June. This reading beat market expectations of 4.9% and helped the USD outperform its rivals. However, the underlying details of the report reaffirmed the view that mounting price pressures are due to temporary factors and the US Dollar Index (DXY) struggled to preserve its bullish momentum.

Meanwhile, weak demand seen in the 30-year US Treasury auction triggered a rebound in Treasury yields and provided a boost to the USD. Currently, the DXY is up 0.55% on the day to 92.74 and the benchmark 10-year US Treasury yield is rising 3.45% to 1.413%.

On Wednesday, industrial production data for May will be included in the European economic agenda. Later in the day, FOMC Chairman Jerome Powell will present the Fed’s semi-annual report to Congress on the state of the US economy.

Technical levels

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