EUR/USD breaks above 1.1800, prints fresh daily highs
- A weaker US dollar boosts EUR/USD further above 1.1800.
- Positive risk sentiment across markets favor the euro.
- DXY is suffering the worst decline in weeks, even as US yields rebound.
The EUR/USD broke above 1.1800 and climbed to 1.1816, reaching the highest level since Thursday. It is hovering around 1.1810 with a positive intraday bias amid a weaker US dollar across the board.
Stocks recover, dollar drops at the beginning of Fed’s week
Economic data from the US came in below expectations. New Home Sales dropped to 676K (annual rate), under the 800K expected. The Dallas Fed Manufacturing Business Index for July dropped from 31.1 to 27.3. The numbers had no impact on the greenback.
The improvement in risk sentiment could have weakened the US dollar. The Nasdaq Composite index reached a new record high while the Dow Jones is down by 0.21%, but the tone is better than during the pre-market. US yields moved to the upside not helping the dollar. The 10-year yield is back at 1.27% after hitting earlier 1.22%.
The decline of the dollar is driving the recovery of EUR/USD. At the same time, EUR/GBP hit a fresh daily low under 0.8540 and the DXY fell to 92.55. The index is down by 0.35%, having the worst day since July 14.
It has been so far a quiet start ahead of the Fed’s meeting this week. On Wednesday, the central bank will release its statement. Most analysts expect limited changes to the statement and provably some a mention about what the economic recovery has achieved. Powell could speak about some discussions about QE tapering options.
Technical levels