- EUR/USD shows resilience after a losing session on upbeat US data.
- Headline inflation exceeded expectations; jobless claims recorded a lower figure than anticipated.
- The slew of positive US data has reignited sentiment of another interest rate hike by the Fed.
- ECB’s cautious stance on interest rates trajectory could undermine the Euro.
EUR/USD shows resilience, turning upward after a losing session. The spot price trades higher around 1.0540 during the Asian session on Friday. Despite the upward movement and reaching weekly highs on Thursday, the EUR/USD pair has encountered a pullback due to the optimistic economic data from the United States (US).
The US economic overview has been dynamic and reinforcing the strength of the US Dollar (USD), with the Consumer Price Index (CPI) exceeding expectations in September, showcasing a consistent annual expansion of 3.7%, slightly surpassing the estimated 3.6%.
The nuanced trend in Initial Jobless Claims for the week ending on October 6, with a modest increase of 209K slightly below the forecast of 210K, suggests a subtle easing.
Thursday's data revealed a surge in the US Producer Price Index (PPI) in September on a yearly basis, rising from 2.0% to 2.2%. Additionally, the Core PPI climbed to 2.7%, surpassing the anticipated easing to 2.3%.
This positive economic data has sparked discussions about the potential trajectory of the Federal Reserve's (Fed) monetary policy, which could undermine the EUR/USD pair. The upbeat indicators have added complexity to the ongoing narrative, leading to speculation about how the Fed might respond.
On the Eurozone side, the cautious approach is influenced by concerns about a slowing economy, with worries that it could potentially dip into a recession. As a result, it suggests that further rate hikes by the European Central Bank (ECB) may not be on the table for the time being, and this cautious stance could undermine the EUR/USD pair.
Investors are expected to watch the US Michigan Consumer Sentiment Index scheduled for release on Friday. This index serves as a vital gauge of consumer confidence, offering insights into the broader economic sentiment. The ongoing analysis of these indicators will likely shape expectations and decisions in the EUR/USD pair.
On the Eurozone docket, the upcoming comments from ECB President Christine Lagarde will be eyed. Lagarde is scheduled to participate in a panel discussion at the World Bank Group and the International Monetary Fund Annual Meeting in Morocco.
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