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ForexLive European FX news wrap: Euro stays upbeat as dollar slumps, DAX rebounds strongly | Forexlive

Headlines:

Markets:

  • EUR leads, CAD lags on the day
  • European equities higher; S&P 500 futures up 0.4%
  • US 10-year yields up 3.2 bps to 4.242%
  • Gold flat at $2,916.47
  • WTI crude down 1.7% to $67.07
  • Bitcoin up 3.5% to $90,624

The euro continues to build on its breakout from yesterday, with EUR/USD running up all the way to test waters just above 1.0700 today. The pair killed two birds with one stone yesterday in taking out the 1.0500 mark and 100-day moving average, before now pulling up to test the 1.0700 level and near the 200-day moving average of 1.0725.

The mood is helped by news from Germany overnight, as a deal was struck to loosen the debt brake as Germany steps up spending on infrastructure and defense. And now they’re even calling for the EU to relax their fiscal rules to accommodate that!

The euro is not the only standout, as the DAX itself is also rebounding strongly today to post gains of over 3% so far. That covers back the heavy losses from yesterday in what has been a wild week for the German benchmark index. It rose by 2.6% on Monday before falling by 3.5% yesterday and is now up 3.3% today. 😵

In FX, the dollar continues to hold in a softer spot on the week with a more positive risk mood now also weighing. The de-risking this week didn’t help the greenback but the opposite seems to be weighing on it. That’s a tough one.

USD/JPY is down 0.3% to 149.35 with GBP/USD up 0.3% to 1.2830. Meanwhile, AUD/USD also recovered from a low of 0.6235 in Asia to 0.6280 levels now. USD/CAD is the only exception, keeping little changed near 1.4400 on the day. Oil prices continuing to be hammered after the OPEC+ decision earlier in the week is perhaps a reason alongside tariff worries still.

As for US futures, the mood is positive but wasn’t as optimistic as it was a few hours ago. S&P 500 futures were up as high as 0.9% earlier but are now just up 0.4% ahead of US trading.

There’s going to be some big US economic data to watch out for in the day ahead with the ADP employment report and ISM services PMI data on the agenda. So, keep an eye out for that alongside more Trump headlines in the session ahead.