- EUR / USD reversed its direction after falling below 1.1700.
- The FOMC-inspired rally of the US dollar index lost momentum on Thursday.
- The major Wall Street indices are posting impressive gains.
After the sharp fall on Wednesday, the pair EUR/USD it spent the first half of the day moving sideways below 1.1700. With the dollar under renewed selling pressure during the US session, the pair gained traction and reached a daily high of 1.1751. At time of writing, the EUR / USD was up 0.5% on the day at 1.1745.
DXY reverses the movement
The aggressive policy outlook from the FOMC seen in the Economic Projections Summary and Chairman Jerome Powell’s comments on reducing assets as of the next meeting provided a boost to the USD on Wednesday. Reflecting the strength of the US dollar, the US Dollar Index (DXY) rose to its highest level in more than a month at 93.52.
However, the positive change observed in market sentiment caused the DXY to push lower in the second half of the day. Currently, the index is losing 0.45% to 93.03. Backed by higher hopes that Chinese real estate giant Evergrande will avoid a default, the S&P 500 Index is up 1.45% on the day to 4,459.
Earlier in the day, US data showed weekly Initial Unemployment Claims rose to 351,000 from 335,000 previously. Additionally, Markit’s Manufacturing PMI fell to 60.5 in September’s flash estimate, while the Services PMI fell to 54.4 from 55.1. However, these disappointing readings had little to no impact on risk perception.
On Friday, IFO’s Business Climate data and Germany’s current assessment will be analyzed to gain new momentum. Later in the day, the August new home sales report will be placed on the US economic docket.
Technical levels
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