EUR/USD falls below 1.1300 as the dollar regains strength
After rising above 1.1300 in the early European session, the EUR/USD has come under additional bearish pressure and remains on the back foot as investors await US ISM Manufacturing PMI data. The US Dollar Index, which reflects the strength of the dollar, continues to rise near 96.50.
The US dollar remains strong on Tuesday, extending gains against the common currency. The EUR/USD pair plummeted to 1.1271, a nearly two-week low, just ahead of the US start. US Treasury rates continue to rise, with the 10-year note reaching a high of 1.66 % for the day. Meanwhile, Asian and European indices continue to rise, supporting US futures.
As the coronavirus Omicron strain spreads over the world, investors believe the US Federal Reserve will have difficulty obtaining financial assistance as anticipated. The Federal Reserve of the United States is projected to raise interest rates at least twice this year, with the first boost as early as March, while inflation remains near multi-decade highs. Simultaneously, speculative interest is concerned that the continued coronavirus outbreak may hamper economic progress, compelling the Fed to provide financial support.
Increasing selling pressure now forces EUR/USD to shed further ground and challenge the area of 2-week lows around 1.1270.
London traders returned after the long weekend but the market theme remains the same. Bond yields are pushing higher and equities are continuing to keep in a good mood to start the new year.
the dollar is keeping steady against the rest of the major currencies bloc with little change for the most part. EUR/USD is slightly lower as it falls deeper into its pre-Christmas range in between 1.1230 to 1.1340.
Stocks are not letting up as European indices are posting solid gains while US futures are also pointing to a slight advance. S&P 500 futures are up 0.2% currently.
Meanwhile, oil is holding a minor gain awaiting the OPEC+ decision in the coming hours. The bloc is expected to stick with the planned 400k bpd output increase in February. WTI crude is up 0.3% to $76.33 at the moment.
Markets News :
- GBP leads, JPY lags on the day
- European equities higher; S&P 500 futures up 0.3%
- US 10-year yields up 3.5 bps to 1.665%
- Gold flat at $1,800.06
- WTI up 0.3% to $76.33
- Bitcoin up 1.2% to $47,431