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EUR/USD advances toward 1.0700 as US Dollar follows Treasury rates lower
The EUR/USD fluctuates near a two-week high after reaching its highest level since mid-December. Despite mixed worries, market mood improves, which weighs on the US Dollar. The yields on US Treasury bonds gain from mixed data, optimism of addressing viral problems, and geopolitical concerns. There are no huge data or events to test buyers, but a lack of market activity could test the upside potential.
EUR/USD hovers around 1.0660, after reclaiming a two-week high, as bulls await additional signs of a positive end to 2022.
The major currency pair surged the highest in nearly three weeks the day before due to widespread US Dollar weakness, primarily because of weaker US Treasury bond yields and cautious market confidence.
Despite recent concerns, the sentiment may be attributable to the mixed statistics and diminishing fears regarding Covid and the Russia-Ukraine crisis.
In spite of this, US 10-year Treasury note rates had their first daily decline in five days and reversed course from a six-week high, falling 1.75 percentage points to 3.82% by the close of the trading session. Notable is the fact that Wall Street benchmarks ended the day with a favorable performance by advancing more than 1.30 percent apiece.
In terms of the data, US Initial Jobless Claims climbed by 225K compared to 216K during the week ending December 24, while Continuing Jobless Claims grew by 1.71M compared to 1.669M during the week ending December 16. In contrast, the 4-week moving average for the same decreased to 221K from the corrected downward previous values of 221.25K.
Approximately seven major nations have lately implemented Covid testing requirements for Chinese tourists in response to the spread of the virus in the dragon nation, although Beijing has rescinded its "zero-Covid" policy. Wu Zunyou, the head epidemiologist of China's Center for Disease Control and Prevention (CDC), also cautioned that Covid is expected to spread over the Christmas season.
However, Italy's rejection of fears of any new Covid variety, following the discovery that fifty percent of aircraft passengers were infected with the virus, appeared to have assisted the markets in dismissing the virus's fears. On the same line may be headlines indicating China's discovery of a Covid antiviral pill and the CDC board's expectations to overcome COVID-19 concerns by mentioning the virus's peak spread in Beijing, Tianjin, and Chengdu.
Elsewhere, Moscow unleashed heavy missile fire on Kiev and Kharkiv, but a lack of major triumph and Ukraine's global support, not to mention a lack of heavy casualties to life and infrastructures, seems to have encouraged risk-taking.
In the near future, a virtual meeting between China's President Xi Jinping and his Russian counterpart Vladimir Putin could entertain traders, while the US Chicago Purchasing Managers' Index for December, which is anticipated to be 41.2 compared to the previous reading of 37.2, will adorn the calendar. The official readings of China's Manufacturing and Non-Manufacturing PMIs for the current month on Saturday will be crucial for determining future trends.
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