EUR/USD looks to US yields – Danske Bank

Chief Strategist at Danske Bank Valtteri Ahti noted the pair’s price action keeps looking to US yields.

Key Quotes

“In the majors, EUR/USD moved lower yet again yesterday, after nudging 1.20 again, as the 10Y US Treasury yield once again reached the key 3% level”.

“A remarkable recoupling of the cross with relative long-term (real) yields has been seen over the past three months, but our rate strategists continue to see limited potential for the spread to move significantly, which limited the prospects for downside in the pair from this angle”.

“Today, US Empire manufacturing and retail sales could be instrumental in determining whether beliefs in a favourable US cyclical position are maintained. Also, possible cues on what the likely adding of Clarida and Bowman to the FOMC could mean for Fed policy as both are due to testify to the Senate”.