The EUR/USD is trading at around $1.2310, lower on the day and close to the bottom end of the limited trading range seen this week. The recent driver of the pair to the downside comes from US 10-Year Treasury yields. The global benchmark is on the rise, topping 2.90% and eyeing the elusive 3% level. The greenback is rising alongside yields, albeit more against commodity currencies than against majors.
Concerns about global trade are surfacing again. Despite the pleasantries exchanged last week, China and the US are still at loggerheads over tariffs. Sorghum used to feed animals, has been the center of the most recent spat as ships had to turn back because of duties. Metals such as aluminum and nickel have been on a tear following not only the tariffs but also as a result of sanctions on Russia. Further trade issues may weigh on the US Dollar.
Earlier in the week, euro-zone inflation was downgraded to 1.3% and the German ZEW Economic Sentiment plunged to negative territory at -8.2 points. These joined other worrying signs about the euro-zone. In the US, data has been somewhat upbeat. The pair is finally beginning to reflect this change, but the ranges are limited.
Jens Weidmann, the President of the German Bundesbank, will speak later on. He has been optimistic and hawkish. If he also acknowledges the weakness, the euro cold react. He speaks at 11:30 GMT in Washington. Euro-zone Consumer Confidence is published.
At 15:15 GMT, the nominee for the President of the New York Fed, will speak in California and may continue talking positively about the economy, repeating his message from earlier this week.
EUR/USD Technical Analysis – slightly lower