EUR/USD reverses the initial pullback to 1.0180.The single currency regains composure and pushes EUR/USD back to the upper end of the familiar range near 1.0260 on Monday.
EUR/USD bid on USD-selling.EUR/USD extends the choppy performance so far at the beginning of the week amidst the continuation of the corrective downside in the greenback, which prompts the US Dollar Index (DXY) to retreat for the third session in a row.
The upbeat mood in the pair looks also underpinned by comments from ECB’s Board member Kazaks, who seemed to share the view of 150 bps rate hikes by June, at the time when he also advocated for a “significant” hike at the September event.
No reaction in the FX space after the German Business Climate measured by the IFO Institute grinded lower to 88.6 in July. In addition, IFO officials said the German economy remains close to a recession, a view fueled by high energy prices and potential shortages of gas in the next months. The same source added that companies see further deterioration in the index in the upcoming months.
What to look for around EUR
EUR/USD managed to put further distance from sub-parity levels seen earlier in the month and approached the 1.0300 neighbourhood during last week.
The pair now looks side-lined as market participants continue to gauge the latest ECB announcements and appear cautious ahead of the upcoming FOMC event on Wednesday.In the meantime, the price action around the European currency closely follows increasing speculation of a probable recession in the euro area, dollar dynamics, geopolitical concerns, fragmentation worries and the Fed-ECB divergence.
EUR/USD rebounds towards 1.0250 amid renewed USD selling
EUR/USD is trading near 1.0250, recovering ground as the US dollar meets fresh supply amid a sudden positive shift in risk sentiment. Investors shrug off global economic slowdown worries and disappointing German IFO data.
GBP/USD recaptures 1.2000 as risk flows return.GBP/USD is advancing above 1.2000 amid the return of risk flows, which weigh negatively on the safe-haven US dollar. The UK political uncertainty and worries over recession persist amid expectations of a 50 bps BOE rate hike in August.
Gold jumps back above $1,730 despite firmer yields.Gold price is picking up fresh bids, regaining $1,730 amid fresh USD weakness. European equities turn positive, ignoring looming recession fears. The further upside in the bullion could be limited by the rebound in the US Treasury yields.