EUR / USD dip at 1.1600 opens the door to 1.1500

  • Optimistic market sentiment is affecting the yield on US Treasuries and the dollar.
  • Inflation in the Eurozone rose 3.4%, exceeding the target of the ECB,
  • The ISM US Manufacturing PMI shows the growth of the overall economy, according to ISM data.

EUR / USD is cutting losses, trading at 1.1596, which at time of writing is barely up 0.13% on the day. As the New York session progressed, market sentiment improved. The four major US stock indexes show growth from 0.68% to 1.72%. On the other hand, renewed optimism at the end of the American session hit US Treasury yields, with the 10-year benchmark coupon shedding more than half a percent to 1.472% for the first time since Monday.

The US Dollar Index, which tracks the dollar against its six peers, posted losses for the second day in a row, falling 0.23% to hold at 94.04, putting upward pressure on the EUR / USD pair.

Eurozone consumer price index rose more than 3.4%

In the economic table of the eurozone was published data on the consumer price index for September. The core CPI rose 1.9% as expected, while the CPI surpassed the 3.3% forecast by economists at 3.4%.

US ISM Manufacturing PMI Gains Most In Four Months

On the other side of the pond, the Institute for Supply Management released its September PMI. The indicator rose to 61.1, which is better than the 59.6 expected by analysts. According to the report, the reading points to “the overall economy grew for the 16th consecutive month after the April 2020 decline.”

At the same time, the University of Michigan consumer confidence index rose slightly to 72.8 points more than it was estimated in 71. The report shows that Americans are somewhat more optimistic about current economic conditions.

The Fed’s favorite inflation indicator, the Personal Consumer Spending Index for August, rose 3.6% year-on-year, a tenth higher than expected.

Next week’s European economic report on Wednesday will show retail sales data on an annual and monthly basis, expected at 0.4% and 0.8%, respectively.

On the other hand, investors will be looking for the ISM US Services PMI for September, which will be published on Tuesday. Also, Wednesday’s ADP employment data for September could be a prelude to what the nonfarm payrolls data may look like after Friday’s release.

KEY ADDITIONAL LEVELS TO VIEW

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