EUR/USD fell to an 8-session low Thursday and tested the top side of the trend line off July's monthly peak, but shorts struggled to maintain bearish momentum despite what seemed to be a dovish hold by the ECB as U.S. data and expectations for the Fed hold sway.
The ECB left rates unchanged and the
However, ECB President Christine Lagarde struck a dour tone on the economy in her news conference, saying the economy remains weak as services the labor market soften while risks to growth are to the downside.
The data indicate labor and inflation may be softening.
yields sank on the data and the dollar's yield advantage over the euro eroded as German-U.S.
2-year spreads tightened after widening earlier in the session.
September core PCE risk looms on Friday.
A downside surprise could lead yields and the dollar lower as investors may expect the Fed to take a less hawkish stance.
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