Dollar Gains Strength, EUR/USD Slumps as U.S. Data Keeps Fed Easing in Check
The EUR/USD pair remains under pressure as the dollar regains strength. The current price is around 1.1650, down from the recent high of 1.1710. This decline can be attributed to renewed demand for the dollar following the latest U.S. data releases.
The U.S. GDP grew by 1.5% annualized in the second quarter, while personal income rose by 0.4% month-over-month in July and spending increased by 0.2%. These figures keep Fed easing expectations in check, with inflation indicators remaining elevated.
The Treasury yield advantage favors the dollar, maintaining a substantial yield premium over euro-denominated assets. The 10-year Treasury yield is holding around 4.66%, giving the dollar an edge.
The eurozone's fundamental backdrop remains relatively stable, with M3 money supply growth accelerating to 3.4% year-over-year in July and lending to non-financial corporations increasing by 4.4%. However, the market is currently reacting more to the relative attractiveness of dollar yields than to the moderate improvement in eurozone data.