German 10y bond yields approach the 1.00% yardstick.US flash Manufacturing PMI expected a tad higher in April.The selling pressure remains well and sound around the single currency and keeps EUR/USD in the negative territory around the 1.0800 zone on Friday.
EUR/USD offered around 1.0800
No change to the offered stance in EUR/USD on Friday, although it managed to rebound from earlier losses in the 1.0790 area, always amidst the sharp recovery in the greenback and higher yields.
Despite US yields now give away part of the earlier advance, the German 10y bund yields remain firm and gradually approach the key barrier at 1.00%, an area last visited in June 2015.
Chair Lagarde spoke in Washington, D.C. earlier in the session, although she made no remarks on monetary policy.
In the euro calendar, advanced Manufacturing PMI in Germany and the EMU is expected at 54.1 and 55.3 for the current month. In the US, the manufacturing gauge is seen improving to 59.7 in the same period.
What to look for around EUR
EUR/USD’s price action shows further deterioration below the 1.0800 key support at the end of the week. The outlook for the pair still remains tilted towards the bearish side, always in response to dollar dynamics, geopolitical concerns and the Fed-ECB divergence. As usual, occasional pockets of strength in the single currency should appear reinforced by speculation the ECB could raise rates before the end of the year, while higher German yields, elevated inflation, the decent pace of the economic recovery and auspicious results from key fundamentals in the region are also supportive of a rebound in the euro.
Key events in the euro area this week: EMU, Germany Flash Manufacturing, Services PMIs (Friday).
Eminent issues on the back boiler: Asymmetric economic recovery post-pandemic in the euro area. Speculation of ECB tightening/tapering later in the year. Second round of the presidential elections in France (April 24). Impact on the region’s economic growth prospects of the war in Ukraine.
EUR/USD has lost its traction after rising toward 1.0850 in the early American session but continues to trade above 1.0800. The data from the US showed that the business activity in the private sector expanded at a softer pace than expected in early April with the S&P Global Composite PMI declining to 55.1 from 57.7.
GBP/USD remains on tack to end week below 1.2900.Following the sharp decline witnessed in the early European session, GBP/USD managed to recover above 1.2900 but came under renewed bearish pressure in the American trading hours. The pair remains on track to register its lowest weekly close since September 2020.
Gold drops to near two-week low, around $1,930 area.Gold came under some renewed selling pressure on Friday and dropped to a near two-week low, around the $1,930 region during the first half o the European session. Fed Powell’s speech at an IMF event sounded extremely hawkish and all but confirmed a 50 bps rate hike.
Bitcoin: Early longers trapped, a move to $46,200 likely.Bitcoin price shows an interesting move to the downside to purge the sell-side liquidity before heading up to $46,200. Investors can expect BTC to stabilize between $40,100 to $40,500 and trigger a run-up to yearly open.