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Forex Today: EUR/USD hits new 1-year high

Forex Today: EUR/USD hits new 1-year high

The renewed weakening of the US dollar and the relative strength of the euro pushed the EUR/USD currency pair to a new 1-year high price above $1.1250.

➡️ Market sentiment is turning back in favor of the Fed's expected next rate hike as most likely the last in the current tightening cycle, despite more hawkish comments from some Fed members in recent days. This has triggered a renewed weak sell-off in the Dollar in the Forex market, while the Euro is clearly the strongest major currency in the long term. This brings the EUR/USD currency pair into focus as it rises today to hit a new 15-month high above $1.1250, which will be of great interest to trend traders since this currency pair has a fairly reliable trend history.

➡️ The Reserve Bank of Australia released the minutes of its recent policy meeting a few hours ago, which showed that the Bank saw a strong case for a further rate hike of 0.25%, but decided to pass on an increase. The minutes also said that current monetary policy is “clearly restrictive” and would need to move further in that direction, with further consideration of a new rate hike at the August policy meeting a certainty. However, the AUD price barely reacted to the release.

➡️ Yesterday there was a release of the US Empire State Manufacturing Index data which came in stronger than expected, suggesting a slightly stronger manufacturing sector.

➡️ Poor Chinese GDP data released yesterday weighed on the Chinese stock market today, with the Hang Seng Index falling by more than 1.5% on the day.

➡️ Yesterday saw US stock markets rise again to hit new 1-year highs in the NASDAQ 100 Index and S&P 500 Index. The outlook is bullish for risk assets and bearish for the US dollar as there is now a higher expectation on further US rate hikes and trend traders will be positioned in these directions.

➡️ In the Forex market, there was little directional movement in today's Asian session, but the New Zealand dollar was the strongest major currency so far today, while the US dollar was the weakest.

➡️ There will be a release of US retail sales data later today.

➡️ There will be a release of Canadian CPI (inflation) data later today.

 

Credit by DailyForex.com

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