Friday’s stronger US dollar drags EUR/USD lower

The US Dollar strengthens on Friday after US data and remarks by some Fed officials. The EUR/USD pair drops 80 pips from top, but holds firm to weekly gains.

The EUR/USD is losing ground on Friday as the US Dollar recovers a part of recent losses. The pair reached a fresh daily low at 1.0987 moving away from the one-year lows it hit on European hours at 1.1075. the pair is trading at 1.0987 at the time of writing.

Fed Governor Christopher Waller said that the central bank has not made much progress on the inflation goal and argued rates need to rise further. In an interview with CNBC, Chicago Fed President Austan Goolsbee mentioned that “a mild recession is definitively on the table as a possibility.”

Economic data came in mixed, with lower-than-expected numbers from Retail Sales, but Industrial Production and University of Michigan’s Consumer Sentiment rose more than expected.

Following data and comments, US yields jumped. The 2-year Treasury yield rose from under 4% to 4.10% and the 10-year from 3.45% to 3.52%. Eurozone bond yields are also rising but at a slower pace.

Despite Friday’s reversal, EUR/USD is still on its way to the highest weekly close in a year. It is holding up, however, the retreat from the highs raises doubts about more gains for the next session.