- EUR/USD remains on a stronger note in the Asian session.
- US Treasury yields retreat, keeping US dollar demand under check.
- Risk aversion also weighs on the demand for USD.
The EUR/USD holds on to the previous day’s gain in the Asian session. The pair is in a continuous bull run from the lows of 1.1985.
At the time of writing, EUR/USD is trading at 1.2230, up 0.04%.
The depreciation in the US dollar keeps the EUR/USD pair buoyed against the majors. The US dollar index (DXY), which tracks the performance of the US dollar against its six major rivals, lost ground on Tuesday, and trades below the 90 mark.
Meanwhile, the US Treasury yields were little changed at 1.65% amid delayed rate hike expectations. Fed officials reaffirmed their stance on the continuation of the easy monetary policy to boost the economy on Monday. In addition to that, another set of mixed US economic data kept the pressure on Fed officials to delay the discussion on tapering measures. Housing Starts in the US tumbled 9.5% in April, while Building Permits rose mildly to 0.3%.
On the other hand, the eurozone economy narrowed down 0.6% in the first quarter( Q1). The EU statistics office Eurostat revealed on Tuesday that eurozone Gross domestic product recorded a fall of 1.8% YoY, while employment fell 0.3% in Q1. The dismal data weighed on the single currency and kept the pair’s gains limited.
Investors turn their attention to the European Central Bank’s (ECB) Philip R.Lane speech, and later Federal Reserve's (Fed) Meeting Minutes to gain fresh trading impetus.
As for now, the dynamics around the US dollar continue to influence the performance of the pair.