EUR/USD erased much of its gains from Wednesday as global PMIs nZRN004KE5 indicate global growth may be slowing, but U.S. rate markets are likely to trump influences from data and Federal Reserve rhetoric.
On Wednesday, Fed Chair Powell reiterated the central bank's focus is to fight inflation, but reactions from rate markets suggest that fight may be short-lived.
Rallies in Eurodollar futures prices extended Thursday as investors reduce expectations for the terminal Fed rate EDZ2 and also pull forward their expectations for the first Fed rate cut EDH3.
U.S. 2-year yields US2YT=RR fell further below the 10-day moving average and struck an eight-session low.
jobless claims data reinforce views the Fed may not hike as much as the central bank suggests.
Weekly claims were above estimates while continuing claims increased from the prior week.
The four-week claims average USJOBA=ECI has been trending higher since early April.
The data suggest potential weakness in the U.S. which may temper Fed hawkishness.
Techs lean slightly bullish.
EUR/USD is consolidating gains from the rally off the June 15 low and a monthly bull hammer candle is in place.
A test of the 1.0750/1.0800 zone cannot be ruled out.
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