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Single Currency Continues to Spiral, EUR/USD Downtrend Cemented

FOREX
  • The single currency was the poorest performing currency in G10 Wednesday, sliding against all others to retain the solid downtrend in EUR/USD. The pair traded to a fresh cycle low of 1.0509, to extend the recent clearance of 1.0632.
  • Sights are on 1.0484 next, the Jan 6 low. Moves in the EUR come ahead of the September preliminary CPI estimate due on Friday, at which markets expected headline inflation to dip below 5.0% for the first time since late 2021.
  • NOK sits at the other end of the table, with the strength in oil markets remaining the primary driver. The prompt WTI crude spread rallied to its highest in over a year, lending further support to oil-tied currencies and putting the NOK at the top of the table. EURNOK is has breached the 11.40-11.60 range that has contained the pair since mid-August, meaning the 200-day EMA at 11.2735 provides the next key support. The NOK bid also allows NOKSEK to retrace yesterday's downtick, with the cross rising by ~0.7% today.
  • The medium-term uptrend across the greenback continues to dominate, with concerns surrounding a possible US government shutdown at top of mind. Fed's Kashkari spoke to say that near-term economic risks from a shutdown could force the Fed to "do less" on policy than might otherwise be the case, leaving markets watching politics and Capitol Hill for any further developments. Fed's Powell hosts a town hall with educators on Thursday, at which the Q&A will be watched for any comments on policy.
  • Focus Thursday turns to regional German CPI data, ahead of a national print expected to show inflation at 4.5% for the Y/Y EU harmonized release. From the US, weekly jobless claims and the tertiary read for Q2 GDP also cross.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
Energy BulletsCommodities
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
Energy BulletsCommodities

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