The single currency alternated gains and losses against the US Dollar (USD) this week, prompting EUR/USD to stabilise around the 1.1200 neighbourhood on Friday, while remaining unable to sustain its earlier bull run toward the 1.1260 zone.
EUR/USD trades on the back foot on Friday as the US Dollar (USD) regains some ground alongside US Treasury yields following Thursday's decline.
Brown Brothers Harriman (BBH) strategist Elias Haddad reports EUR/USD trading defensively below 1.1200 after weaker-than-expected Eurozone PMI, which still signals robust growth.
The US dollar is attempting to resume its upward trend against the backdrop of a sharp fall in Treasury bond yields. The DXY is being supported by the relentless rise in oil prices and the weakness of the euro, which accounts for the largest share of the basket of major currencies.
The US Dollar is attempting to resume its upward trend against the backdrop of a sharp fall in Treasury bond yields. The DXY is being supported by the relentless rise in oil prices and the weakness of the euro, which accounts for the largest share of the basket of major currencies.
Danske Bank highlights weaker Euro sentiment amid rising French CDS spreads, with EUR/CHF declining and EUR/USD briefly falling below 1.12. US and German bond yields also dropped across the curve, while Eurozone consumer confidence weakened more than expected in October.
United Overseas Bank strategists (UOB) Quek Ser Leang and Lee Sue Ann report that EUR/USD outperformed modestly as the US Dollar (USD) softened, but price action remains choppy and largely directionless.
The EUR/USD pair trades in negative territory around 1.1210 during the early European trading hours on Friday. Worries about France's ability to tackle its huge debt burden have hurt French government bonds and exert some selling pressure on the Euro (EUR) against the US Dollar (USD).
EUR/USD Forecast: October ECB Pause Expected Before Further Hikes MUFG expects the Euro to recover against the US Dollar next year, but its French fiscal scenarios underline the risks before the ECB's October meeting. The Euro-to-Dollar exchange rate slipped to $1.1215 on Thursday, down 0.17%, leaving it close to MUFG's.
Recent trading sessions have not been particularly eventful for EUR/USD price action in the short term. In fact, recent moves have been limited to roughly 0.2%, highlighting a clear lack of direction within the market.
Worries continue to show in French government bonds and the volatility hasn't yet quieted down in related markets. This has led to a stern sell-off in the single currency since early September, and more than six weeks later, there still hasn't shown much for recovery.
EUR/USD loses 0.33% on Thursday, reversing earlier gains as the US Dollar (USD) stages a rebound after slipping to a three-week low during Asian trading hours. Meanwhile, political turmoil in France and uncertainty surrounding the country's fiscal outlook continue to weigh on the Euro (EUR).