- EUR/USD pair is edging modestly higher on Friday.
- Eurozone posted a larger-than-expected trade surplus in June.
- Focus shifts to UoM Consumer Sentiment Index data from US.
The EUR/USD pair closed modestly lower on Thursday but managed to edge higher during the European trading hours on Friday. As of writing, the pair was up 0.18% on the day at 1.1748.
The upbeat data from the euro area seems to be helping the shared currency gather strength. Eurostat announced on Friday that the eurozone posted a trade surplus of €12.4 billion (seasonally adjusted), compared to the market expectation of €9.3 billion.
On the other hand, the greenback is having a difficult time finding demand, allowing EUR/USD to stay in the positive territory.
Following Wednesday's decline, the US Dollar Index (DXY) rose slightly on the back of rising US Treasury bond yields on Thursday. Currently, the DXY is down 0.1% at 92.90. Later in the session, the University of Michigan will release the preliminary Consumer Sentiment Index for August.
EUR/USD near-term outlook
TD Securities analysts don't think that EUR/USD recent rebound will be durable.
“We are not convinced that EUR/USD's bounce from 1.17 support is durable, especially as the real rate divergence between US and Germany persists, and likely to get wider into the fall," analysts said. "EUR weakness is not unique to the USD, it is broadly based as the ECB's TWI measure (19 currencies) has weakened since June.”
EUR/USD: Burgeoning divide between US and German real rates to cap the rebound – TDS.
