EUR/USD holds steady amid mixed US economic data, Fed comments

• EUR/USD remains stable, trading around 1.0850, despite a dip to 1.0895 earlier in the session.
• US economic indicators show signs of strain from higher interest rates, with rising unemployment claims and a drop in industrial production.
• Euro's resilience is bolstered by a weaker US Dollar and improved risk sentiment despite concerns of stagflation in the Eurozone.

EUR/USD stays firm during the North American session, almost unchanged, printing gains of 0.06%, and exchanging hands at around 1.0850s after hitting a daily low of 1.0895, shy of challenging the 1.0900 figure.

Euro keeps gains vs. weakening US Dollar, market eyes EU’s inflation, Lagarde speech

Economic data in the United States (US) continues to feel the lagging impact of higher interest rates set by the Federal Reserve. The US Bureau of Labor Statistics (BLS) revealed that unemployment claims for the last week rose the most in the last three months while Industrial Production plunged. US export and import prices cooled down, signs that the inflation battle continued to be won by the US central bank.

Nevertheless, Fed officials pushed back against estimates for more than 88 bps of rate cuts next year. Cleveland’s Fed President Loretta Mester added that whether further tightening is needed would be data-dependent. Lately, Fed Governor Lisa Cook said, “a soft landing is possible,” though added that continued demand could slow the pace of disinflation.

In the meantime, the Greenback is feeling the pain, depreciating further against most G8 currencies, including the Euro (EUR). The US Dollar Index (DXY) is a measurement of the performance of six currencies against the buck, favoring the former, as the DXY drops 0.06%, down at 104.32.

On the Eurozone (EU) front, the European Central Bank (ECB) President Christine Lagarde crossed the wires but failed to comment on monetary policy. The Euro’s rise could be attributed by overall US Dollar weakness and risk appetite improvement. Recent data from the EU, with soft PMI, GDP for Q3 contracting, and Industrial Production sinking, paints a stagflation scenario in the bloc. Hence, that could weigh on the single currency.

Ahead in the economic calendar, the EU’s docket will feature the Harmonized Index of Consumer Prices (HICP), and a speech of the ECB’s President Lagarde. In the US, housing data, Building Permits, and Fed speakers are expected to offer fresh impetus to EUR/USD traders.

EUR/USD Technical Levels