EUR/USD Steady Amid Mixed Economic Data, Fed Comments

• The EUR/USD pair remains stable, trading around 1.0850, despite a drop to 1.0895 earlier in the session.
• US economic indicators show signs of strain from rising interest rates, with jobless claims rising and industrial production falling.
• The Euro’s resilience is reinforced by Dollar weakness and improving risk sentiment, despite fears of stagflation in the Eurozone.

The EUR/USD pair remains firm during the North American session, almost unchanged, with gains of 0.06%, and is trading around 1.0850 after hitting a daily low of 1.0895, far from challenging the figure of 1.0900.

The Euro maintains gains against a weakened Dollar, the market pending EU inflation and Lagarde’s speech

Economic data from the United States (US) continue to show the delayed effect of the increase in interest rates set by the Federal Reserve. The US Bureau of Labor Statistics (BLS) revealed that jobless claims last week recorded the largest increase in the last three months, while Industrial Production plummeted. US export and import prices cooled, signs that the inflation battle continues to be won by the US central bank.

However, Fed officials balked at estimates of more than 88 basis points of rate cuts next year. Cleveland Fed President Loretta Mester added that the need for further tightening would depend on the data. Recently, Fed Governor Lisa Cook stated that “a soft landing is possible,” although she added that continued demand could slow the pace of disinflation.

Meanwhile, the Dollar suffers and continues to depreciate against most G8 currencies, including the Euro (EUR). The Dollar Index (DXY), which measures the behavior of six currencies against the Dollar, favors the first, since the DXY falls 0.06%, to 104.32.

Regarding the Eurozone (EU), the president of the European Central Bank (ECB), Christine Lagarde, made statements but did not comment on monetary policy. The rise in the Euro could be attributed to the overall weakness of the US Dollar and improving risk appetite. The latest data from the EU, with weak PMIs, the contraction of GDP in the third quarter and the collapse of Industrial Production, paint a scenario of stagflation in the bloc. This could affect the single currency.

The EU’s economic agenda includes the Harmonized Index of Consumer Prices (HICP) and the speech of Lagarde, president of the ECB. In the US, housing data, building permits, and Fed speakers are expected to offer further impetus to EUR/USD traders.

EUR/USD technical levels