- EUR/USD is trading at 1.0919, up 0.36%, as disappointing US GDP and jobs data suggest the Fed may delay a rate hike.
- The US Dollar Index (DXY) lost 0.29% to 103.187, providing new support for the Euro as US Treasury yields also fell.
- The German Harmonized Index of Consumer Prices (HICP) beats estimates, which strengthens the Euro and sets the stage for a possible run towards the 1.1000 level.
He Euro (EUR) posts solid gains vs. US dollar (USD)as US Treasury yields fall on weaker economic data in the United States (US), suggesting the US central bank may hold rates No change for the rest of the year.
EUR/USD gains 0.36% on weak US GDP and jobs data, while German inflation figures lift EUR
Late in the New York session, the EUR/USD pair is trading at 1.0919, up 0.36%, despite month-end flows generally supporting the Dollar, but signs of economic slowdown and high inflation in Germany keep the common currency in the lead.
Given US Federal Reserve Chairman Jerome Powell’s remarks that a strong labor market and above-trend economic growth could justify rate hikes by the Fed, data from the last few days have seen Powell’s reasons for not raising rates.
The ADP national employment report for August came in below estimates of 195,000, at 177,000, reinforcing Tuesday’s JOLTs report, which started the trend of bad jobs data that could continue tomorrow, with initial jobless claims ahead of Friday’s US Nonfarm Payrolls report.
At the same time, the US Department of Commerce showed that the US economy is starting to stagnate, as the second estimate of Gross Domestic Product (GDP) for the second quarter was 2.1%, below the estimate of 2.4. % previously posted.
Market participants’ response to the data was seen in US Treasury yields, which mostly fell, albeit matching their earlier losses. Consequently, the Dollar fell back, as shown by the Dollar Index (DXY), which lost 0.29% and stood at 103.187.
On the other hand, the Euro was boosted by the German Harmonized Consumer Price Index (IPCA), with a monthly and annual increase. Inflation month-on-month was 0.4%, above estimates of 0.3%, and 6.4% year-on-year, above the 6.3% forecast.
Based on the latest fundamental data, the trend for EUR/USD would remain bullish, albeit poised for a pullback, before challenging the 1.1000 area. To the upside, the pair would find resistance at the 100 DMA at 1.0925, which might not be easy to break ahead of Thursday’s data.
EUR/USD technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
