August 3, 2022 12:08 AM ET
By: AnalysisWatch
EUR/USD picks up offers to refresh the intraday high at 1.0195 while reversing the previous day's pullback from the monthly high. In doing so, the major currency pairs are taking into account the recent shift in sentiment that took place in Europe early Wednesday morning.
Although disputes between the U.S. and China over the Taiwan issue have challenged risk appetite, recent firmer prints from China's Caixin Services PMI for July appear to have called EUR/USD buyers back ahead of a slew of data out of Europe and the U.S. The private services index from the Land of Dragons rose to 55.5 from 48 expected and 54.5 previously. 0.15% on the day, while the yield on 10-year U.S. Treasury bonds fell three basis points to 2.71% at last count.
In addition, mixed signals from the U.S. Federal Reserve (Fed) gave EUR/USD buyers hope. St. Louis Fed President James Bullard dismissed recession fears in the U.S. while also advocating a 50 basis point (bp) rate hike. Reuters reported that San Francisco Fed President Mary Daly also said she would wait for upcoming data to decide whether to scale back rate hikes or maintain the current pace. Reuters reported that Chicago Fed President Charles Evans, however, favored a 50 basis point rate hike at the September meeting if inflation did not improve, Reuters reported. On the other hand, Cleveland Fed President Loretta Mester said she did not believe the country was suffering from a recession, adding that the labor market was in good shape. On inflation, however, she noted that it has "not declined at all."
Comments