- PMI data surprises negatively and weighs on the dollar.
- EUR/USD accelerates to the upside and climbs to 1.0019.
- Stocks on Wall Street rise after the report.
The dollar tumbled after August’s preliminary PMI report, propelling EUR/USD back above parity. The pair climbed to 1.0019, marking a new high for the day, and recovering in this way after having marked a 20-year low at 0.9897, in hours of the European session.
The EUR/USD rebound was triggered by the release of the US August PMI report, which showed lower-than-expected figures and a large contraction in the service sector index.
Following the report, Treasury bond yields changed direction dramatically and fell. The 10-year bond went from yielding 3.08%, to being below 3.0%, the 30-year tranche from 3.28% to 3.22%. This made the yen rise on all fronts and become the best of the day. EUR/JPY fell from 137.00 to reach levels below 136.00.
EUR/USD bounce lost steam above 1.0000, but bias remains bullish, supported by dollar weakness. In the event that the greenback recovers momentum, then the vulnerability in the pair will return.
Technical levels
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
