- EUR/USD remains on the backfoot as DXY tracks the uptick in the yields.
- ECB minutes showed a divided outlook on inflation, the risk tone remains upbeat.
- Yields and the dollar lead way, as US economic data fail to impress.
EUR/USD is holding the lower ground below 1.1350, as the US dollar attempts a bounce in tandem with the Treasury yields amid a risk-on mood.
The sentiment on Wall Street improved dramatically, in anticipation of the corporate earnings reports. That fuelled a fresh sell-off in the US Treasuries, which in turn, prompted the yields to resume their uptrend. The upturn in the yields lifted the sentiment around the dollar at the euro’s expense.
Escalating Russia-Ukraine crisis, with the US imposing sanctions on four Ukrainian officials, accusing them of destabilizing Ukraine, also boosts demand for the safe-haven US dollar.
Meanwhile, the shared currency remains undermined by the European Central Bank (ECB) minutes of its December meeting, which underscored policymakers’ division on the inflation outlook. Further, dovish comments from ECB President Christine Lagarde and policymaker Pablo de Cos bode ill for the major.
Looking ahead, the main currency pair continues to remain at the mercy of the price action in the yields and the dollar, as traders shrug off mixed American economic data releases in the downbeat weekly Jobless Claims and Existing Home Sales. The Philadelphia Fed Manufacturing Survey for January, however, outpaced expectations with 23.2.