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The EUR/USD pair bounces off year-to-date lows around 0.9800 as price action gets overstretched. The prevalent market sentiment is negative and failed to reinforce the US dollar.
US jobless claims were better than expected, while the EU’s consumer confidence is disappointing the Eurozone. The Euro is almost flat after hitting a fresh low at 0.9806 on Fed’s interest rate decision.
The US central bank further confirmed an aggressive stance with most policymakers expecting additional increases to the Federal funds rate; therefore, the interest rate differentials between the EU and the US are a headwind for the EUR/USD.
The EUR/USD began trading at around the day’s lows and hit a daily high of 0.9907 before paring those gains and settling around current spot prices. At the time of writing, the EUR/USD is trading at 0.9842, registering minimal gains of 0.03%.
US Dollar Index erases some of its earlier gains, down 0.09% at 111.347, a tailwind for the EUR/USD. On the contrary, the US 10-year Treasury bond yield remains positive, up at 3.682%, gaining 14 bps, after hitting an 11-year high at around 3.71%.
