Showing the New York session
Where we are
EUR/USD is trading at 1.1669, down 0.06% on the day. The pair has drifted lower through the Asian and early European sessions, failing to hold onto any intraday gains and now sitting near the bottom of its overnight range. This move marks a clear weakening of the single currency against the dollar.
What's driving it
The market's immediate focus has shifted to the US economic data that has already printed this morning. While the actual figures are not available, the fact that Core PCE Price Index m/m, Prelim GDP q/q, and Prelim GDP Price Index q/q have all been released means any market reaction is now a function of how these prints are being interpreted. This has clearly favoured dollar strength, pushing EUR/USD lower. Domestically, the European Central Bank's hawkish-leaning hold in July, with a tightening bias still in play and markets pricing in a ~50% chance of a September hike, provides a structural floor for the Euro. However, this domestic hawkishness is currently being overshadowed by the immediate dollar-positive interpretation of the US data. The Eurozone unemployment rate holding steady at 6.3% in June offers little incremental news to shift the narrative.
The release of key US inflation and growth data has immediately driven a stronger dollar, pressuring EUR/USD.
The ECB's hawkish-leaning stance and the potential for a September hike remain a supportive backdrop for the Euro, but are currently secondary to US data interpretation.
Speculative positioning shows a crowded short in Euro futures, with net non-commercials at -59,088 contracts, indicating potential for a squeeze on positive Euro surprises, though none are immediately apparent.
VS YESTERDAY
EUR/USD is trading at 1.1669, down 0.06% on the day. The pair has drifted lower through the Asian and early European sessions, failing to hold onto any intraday gains and now sitting near the bottom of its overnight range. This move marks a clear weakening of the single currency against the dollar.
NY session watch
With the major US data already released, the New York session will be about digesting the market's reaction and looking for any further catalysts. The absence of further high-impact Eurozone data today means the Euro's trajectory will be largely dictated by USD flows and any evolving sentiment around US growth and inflation. The US 10Y yield trading at 4.631% and the DXY at 99.00 are key indicators to monitor for confirmation of the dollar's strength. The biggest risk to the prevailing narrative would be a sudden shift in market sentiment that re-emphasises the ECB's hawkish bias, potentially triggered by any unexpected hawkish commentary from ECB officials or a sharp reversal in risk sentiment that benefits risk-sensitive currencies over the dollar.
TODAY'S EVENTS
HEADLINES
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