EUR/USD boosted by softer US dollar, retreating US yields

Profiting from the declining value of the US dollar, the EUR/USD pair keeps rising, currently trading at 1.0942. One major factor supporting the strength of the Euro and weakening the dollar is the decline in US Treasury bond yields.

The likelihood of a rate cut by the Federal Reserve supports the EUR/USD. Rate cuts are opposed by significant ECB Governing Council members.

On Monday, the Euro gained strength against the US dollar, which is still weak due to the ongoing decline in US Treasury bond yields. The Eurozone has a bleak economic outlook, but the rally in EUR/USD is sustained by a weaker US dollar.

As of this writing, buyers are aiming for the 1.1000 mark later in the week, with the EUR/USD pair trading at 1.0942 as the Euro rises versus the US dollar while market participants await crucial economic releases.

The dollar remains weak for the second consecutive trading day. The US Dollar Index, a measure that tracks the buck’s value against six currencies, dropped 0.34%, is at 103.46, and remains the primary reason for the Euro’s strength.

According to the futures market, the latest inflation report in the United States has increased the odds for rate cuts by the US Federal Reserve next year.

The minutes of the Federal Reserve’s Open Market Committee (FOMC) most recent meeting would be available on the calendar on Tuesday. Jobless claims data will be released on Wednesday, along with preliminary readings for November’s Chicago Fed National Activity Index and Flash PMI figures.

Germany’s IFO survey, the most recent minutes of the European Central Bank meeting, and the November PMIs would all be available on the EU docket across the pond.

Hernandez de Cos, a member of the ECB, stated that rates should remain at their current level, while Pierre Wunsch emphasized that a bet on a reduction in rate cuts could lead to another hike by the EU’s central bank.

Joachim Nagel, the president of the Bundesbank and a member of the ECB’s Governing Council, resisted rate cuts, while Holtzmann stated that the ECB is prepared for further tightening “if necessary.”