After some hesitation earlier in the day, the USD index bounced back above the 104.00 figure to turn positive on the day ahead of the opening bell on Wall Street. The back was supported by deterioration in risk sentiment across the financial markets as demand for riskier assets has waned somehow after the initial rally.
Also, the buck was underpinned by rising Treasury yields alongside with upbeat economic data. Durable goods orders in the US increased by 0.7% in May, exceeding the consensus estimate, as analysts expected the figure to remain unchanged. After the report, market worries about growth shifted back to worries about inflation, triggering a local bounce in the safe-haven dollar.
Now, traders await the ECB’s three-day forum in Portugal, where central bank governors will exchange views regarding current policy issues. This time, the event is especially critical as global monetary authorities are fighting elevated inflation through raising rates, while the economy risks falling into a recession in a couple of quarters.
Interestingly, the EURUSD pair stays upbeat around the 20-DMA even as the greenback reentered positive territory. The shared currency encountered resistance just below 1.0600, still struggling to overcome this immediate barrier. However, should ECB’s Lagarde refrain from downbeat comments on the economy during the upcoming forum, the euro may stage a more sustained ascent in the coming days while the overall trend looks set to remain bearish for the time being.
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