EUR/USD rose slightly in overnight trading but surrendered those gains in Europe's morning and early NY trade, leaving downside risks to dominate with the help of ECB comments and the U.S. interest rates.
ECB President Christine Lagarde said inflation is likely to moderate in 2022 and that conditions for a 2022 rate hike are unlikely to be met nIfp349rS5, resulting in softer euro zone rates and Euribor price gains FEIZ2.
economic data boosted U.S. rate complex.
The November New York Fed Empire State current conditions index rose to 30.9 from 19.8 in October.
While the data is second-tier the prices paid component came in at 83.0 compared to October's 78.7, reinforcing investors' concerns about inflation.
rates rallied, with June 2022 eurodollars EDM2 erasing most overnight gains while the 10-year yield US10YT=RR rose to a 6-session high.
Interest rates appear close to resuming their recent rallies, underpinning the dollar.
EUR/USD is likely to get back on track for lower levels as its brief consolidation phase is close to completion and RSIs indicate downside momentum.
A fall toward the 1.1200 area seems likely.
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