The EUR/USD is on a downtrend amid Fed s rate stance and risk-on sentiment, with German inflation and US jobs data ahead influencing further movements.
(Bloomberg) The dollar kicked off the new year with its biggest daily jump since March as traders pared back bets on the scale of the Federal Reserve’s 2024 interest-rate reductions. Most Read from BloombergIran Sends Warship to Red Sea After US Sinks Houthi BoatsHarvard’s President Claudine Gay to Resign After ControversyTokyo Runway Collision Leaves 5 Dead, Aircraft AblazeUS Pressured Netherlands to Block China-Bound Chip MachineryElectric Car Models Eligible for $7,500 Tax Credit Cut to 13
The dollar loved the combination of higher yields and some risk aversion with the trade-weighted greenback rallying from 101.42 to 102.20. Technically, DXY stays trapped in the downward trend channel since early November. EUR/USD fell from 1.1045 to 1.0942. A firmer floor below core bond yields could help a more firm bottoming out pattern in the dollar as well.