EUR/USD Plunges as US Treasury Yields Hit Decade Highs
The EUR/USD pair has fallen to new lows due to rising US Treasury yields. The yield on 10-year bonds is currently at 5.3%, while the 30-year bond yield is at 5.64%. Both rates are at their highest levels since 2002, supporting the dollar's value.
The main driver behind these high yields is inflation, which has increased due to expensive energy prices. The US-Iran negotiations have not yielded significant progress, and oil prices remain high. This combination of factors has reduced the probability of a Federal Reserve rate hike in October from 51% to approximately 38% following softer-than-expected PCE data.
Technically, the EUR/USD pair remains bearish, with targets at 1.1300 and 1.1290-1.1283. A recovery above 1.1355 would be needed to delay the bearish scenario. The upcoming US jobs report on Friday will be a crucial catalyst for the next directional move.