EUR/USD: A busy week ahead with Fed & ECB minutes as well as Nonfarm Payrolls By fx_ross EURUSD ECB Fed Currencies NFP
US data will be watched closely as will the Fed and ECB minutes.
EUR/USD was down some 0.5% on Friday due to the pick-up in pessimism about the global economic outlook. Thehas found its feet yet again due to the demand for the safe-haven currency. The euro fell to a low of 1.0365 vs the greenback from a high close to the 1.05 area. The potency of tighter monetary expectations in the face of higher in inflation is playing havoc on markets and supporting demand for US assets which has sent the benchmark 10-year US Treasury yields to one-month lows.
The Federal Reserve is expected to continue to hike rates in the face of soaring price pressures at the same time that investors are worrying over the economic outlook. Data on Friday did little to squash the concerns with US manufacturing activity slowing more than expected in June, with a measure of new orders contracting for the first time in two years.
Nevertheless, the US dollar index gained 0.36% against a basket of currencies to 105.12, albeit still trading shy of the 20-year high of 105.79 reached on June 15. This has crippled the euro, putting the focus back on the five-year low of $1.0349 printed on May 13 even though the European Central Bank is also expected to raise interest rates this month. This will be the first time in a decade, although economists are divided on the size of any hike.
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