The US Dollar (USD) charted decent losses on Wednesday, especially vs.
EUR/USD receded further and flirted with the 200-day SMA. The Dollar retreated on the back of strong JPY appreciation. Flash PMIs signalled some flattening of business activity in the bloc. The US Dollar charted decent losses on Wednesday, especially vs. the Japanese yen, dragging the USD Index to the boundaries of the 104.00 level amidst mixed developments in US yields across the spectrum. In that context, EUR/USD dropped to fresh lows near 1.
In the Eurozone, it is worth recalling that the ECB’s Luis de Guindos hinted at a possible interest rate cut in September. Meanwhile, the policy divergence between the Fed and the ECB is expected to remain almost unchanged going forward, as both central banks are forecast to cut rates after the summer break.
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