The European single currency has slipped marginally below the 1,0550 level in the early hours of Thursday as the US currency remains in the spotlight with the crucial 1,05 level the next challenge.
US Treasury yields continue to be at high levels, the 10-y notes approaching again the recent high of 4.48 level something that supports the US currency.
My assessment that we will soon see some decompression in yields remains, with a return to near 4.00 levels being a likely scenario.
Yesterday's announcement on the path of consumer inflation in the United States did not provide any surprises with the result that there was no catalyst in play that could significantly change the bets.
The momentum that the US currency has developed in the wake of the US elections remains on the table and apart from some small subtle corrections the European currency has so far been unable to react.
Τhe political crisis that has erupted in Germany and the questioning of the government is putting an additional burden on the euro.
Ιn an environment of doubts, today's announcement on the development path of the European economy is expected with particular interest as the European currency is desperately looking for the catalyst to return to the fore.
The agenda is filled by the weekly claims for unemployment benefits in US as well as producer inflation.
I maintain a fairly conservative thought and although I think there will be a reaction of the European currency soon it is difficult to determine the right point so I prefer to remain on a wait-and-see attitude and not go against the trend.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.