- EUR/USD kicks off the new trading week on a subdued note.
- US Treasury yields underpin the demand for the US dollar.
- US Dollar Index pops towards 93.00 on the stronger job data.
The buying tone surrounding the US dollar amid rising US Treasury yields keeps EUR/USD edgy on Monday in the Asian trading session. After touching the multi-month low near 1.1740, the pair notches 20-pips higher.
At the time of writing, the EUR/USD is trading at 1.1761, up 0.01% on the day.
The US Dollar Index (DXY), which tracks the performance of the greenback against the six majors, reclaimed its supremacy and stood strong near 93.00 as US Treasury yields rebounded from the lower levels.
The US 10-year benchmark Treasury yields edged higher at 1.30% with more than 1% gains on Monday. The hawkish comments from the Fed’s officials and significant gains in the job data supported the narrative of the sooner-than-expected rate hike scenario.
The nonfarm payroll (NFP) added 943k jobs in July as compared to market expectations of 870k increrase.
On the other hand, the single currency struggles on downbeat economic data. The IHS Markit Eurozone Construction Purchase Manager Index (PMI) came at 49.8 in July from the 50.3 in the previous month.
Meanwhile, the European Central Bank (ECB) Governing Council Member Jens Weidmann said the shift in monetary policy will be quite a possibility if inflation rates spiked above the central bank’s target.
As for now, traders are waiting for the German Trade Balance data to gauge the market sentiment.
