FX Market Update: Greenback supported by inflation as euro, sterling slip.
USD – Remains supported as firmer US inflation data and elevated yields reinforce dollar demand, keeping the greenback underpinned despite some hesitation around near‑term direction.
EUR – Trades with a softer tone as stronger‑than‑expected US inflation boosts the dollar, pushing the single currency lower and limiting upside despite relatively steady Eurozone fundamentals.
GBP – Remains vulnerable against the dollar, with sterling struggling to build momentum amid mixed technical signals and lingering political uncertainty in the UK.
USD:
The dollar continues to find support as higher US Treasury yields and firmer inflation readings reinforce expectations that the Federal Reserve will keep policy restrictive for longer. Hotter US CPI data has strengthened the greenback, with markets scaling back near‑term rate‑cut expectations and favouring USD on yield differentials. While broader risk sentiment remains relatively stable, the dollar’s near‑term direction is likely to stay closely tied to incoming US data and further confirmation on the inflation path.
EUR:
The euro weakened below recent support levels as stronger US inflation data bolstered the dollar, outweighing domestic Eurozone drivers. EURUSD slipped back toward the mid‑1.17 area, with the single currency struggling to attract demand in the face of widening yield differentials. While ECB rhetoric remains relatively firm, near‑term euro performance continues to be dictated by USD strength and global macro developments rather than euro‑specific catalysts.
GBP:
Sterling remains on the back foot, trading near recent lows against the dollar despite holding above key technical support levels around 1.3500. While the pair retains modest upside potential above its longer‑term moving averages, broader sentiment toward the pound remains fragile. UK political uncertainty and external dollar strength continue to cap gains, leaving GBP vulnerable should USD support persist.
Economic Calendar
| Expected | Previous | ||
|---|---|---|---|
| 10am BST - EUR | Eurozone GDP data MoM | 0.1% | 0.3% |
| 10am BST - EUR | Eurozone GDP data YoY | 0.8% | 1.3% |
| 1:30pm BST - USD | US Core PPI data MoM | 0.3% | 0.1% |
| 1:30pm BST - USD | US Core PPI data YoY | 4.3% | 3.8% |
| 1:30pm BST - USD | US PPI data MoM | 0.5% | 0.5% |
| 1:30pm BST - USD | US PPI data YoY | 4.9% | 4% |