EUR/USD remains on track to end week little changed above 1.1700

  • EUR/USD recovered modestly after declining to 1.1700 area.
  • US Dollar Index stays in the positive territory above 93.20.
  • 10-year US Treasury bond yield is clinging to modest daily gains.

The EUR/USD pair declined to a daily low of 1.1701 in the early American session but managed to erase a large portion of its daily losses. As of writing, the pair was down 0.1% on the day at 1.1725 and was on track to end the week virtually unchanged.

US stocks stay resilient on Friday

Earlier in the day, the data from Germany showed that the IFO – Business Climate Index declined to 98.8 in September, missing the market expectation of 100.4, and this reading weighed on the shared currency. Additionally, the IFO Current Assessment Index edged lower 100.4 from 101.4 in August.

On the other hand, the risk-averse market environment allowed the greenback to continue to outperform its rivals in the first half of the day. However, with Wall Street’s main indexes holding near Thursday’s closing levels, the US Dollar Index (DXY) struggled to preserve its bullish momentum and helped EUR/USD stage a rebound. Currently, the DXY, which touched a session high of 93.42, is up 0.2% at 93.27.

In the meantime, hawkish comments from Fed officials continue to support the greenback. Kansas City Fed President Esther George said on Friday that the criteria for bond taper have been met. On a similar note, Cleveland Fed President Loretta Mester noted that she supports starting to reduce asset purchases in November. 

Technical levels to watch for

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