Dollar Bounces Back to 99.07 Amid EUR/USD Rejection at 1.1711

The EUR/USD pair traded at 1.1654 against the dollar on Tuesday after rejecting the level of 1.1711, which it reached late last week. This move comes as the dollar index recovered to 99.07, up 0.1% on the day.

Despite the German Ifo Business Climate Index rising to 88.8 in August from 86.7 in July, beating a consensus forecast of 87.2, EUR/USD moved less than 10 pips in response.

The dollar's recovery is seen as a positioning move rather than a trend change, with the index sitting at 99.07, which is 52 basis points above its August 22 low but still within an established downtrend.

The euro's rally has legs beyond a technical bounce due to the dollar losing the trade on fiscal ones, specifically the U.S. Treasury announcing it would double the size of liquidity-support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors.