EUR/USD hits fresh monthly lows, attention turns to FOMC meeting next week

  • EUR/USD reaches a three-week low at 1.2724.
  • Market sentiment weighs on the EUR/USD as flows flew to the safe-haven USD.
  • The US Dollar Index rises above 93.00 despite weak US consumer sentiment data.

EUR/USD keeps sliding for the second day in a row, exchanging hands at 1.1728 down 0.30% on the day at the time of writing. After a stellar US Retail Sales report on Thursday, the EUR/USD pair is trading at three-week lows, on broad US dollar strength. 

The US Dollar Index (DXY) is at three-week highs

The market mood is in risk-off mode, with US stock indices sliding between 0.26% and 1.19% and bond yields rising. The US 10-year benchmark rate is at 1.368%, up almost four basis points on Friday, underpinning the greenback. The US Dollar Index is up 0.33%, sitting at 93.17.

During the European session, the Eurozone Core Consumer Price Index (YoY) rose by 1.6%, in line with expectations. Meanwhile, the Core CPI for August (MoM) edged higher 0.3% as foreseen.

Across the pond, the US University of Michigan Consumer Sentiment increased slightly to 71 in September versus 70.3 in the previous month, although it was worse than the 72.2 expected. The report attributed the declines to higher prices, as consumers expect the inflation rate to rise 4.7%, matching the highest since 2008.

Investors’ focus turns to next week events. The Federal Open Market Committee will discuss monetary policy issues, being the QE reduction the spotlight of the statement.

Key technical levels to watch

FX

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