Ella 
In early Asian trading on Thursday, EUR/USD lost momentum near 1.0500. A stronger dollar, better U.S. economic data and rising U.S. bond yields weighed on EUR/USD. EUR/USD is currently trading around 1.0512, with an intraday increase of 0.09%.
Meanwhile, the U.S. dollar index (DXY), which measures the greenback against a basket of currencies, rose to 106.60, its highest level since November, while U.S. Treasury yields were higher, with the 10-year U.S. Treasury yield closing at 4.618%, the highest level since 2007. The highest level since the beginning of the year.
Weak economic data in the Eurozone weighed on the euro and became a headwind for EUR/USD. The GfK German consumer confidence index fell to -26.5 in October from -25.6 in September. In addition, Spain and Germany will publish preliminary consumer price index (CPI) values for September. Spanish inflation is expected to rise at an annual rate, while German inflation is likely to fall. These preliminary inflation data will be crucial in determining monetary policy expectations and may have an impact on markets.
In the United States, data released by the U.S. Census Bureau on Wednesday showed that U.S. durable goods orders improved in August, rising 0.2% month-on-month and down 5.6% year-on-year, compared with expectations for a 0.5% decline. Elsewhere, durable goods orders, excluding transportation, rose 0.4% monthly, beating expectations of 0.1%. Core capital goods orders rose 0.9% month-on-month, beating market expectations of 0.4%. The U.S. dollar strengthened across the board after better-than-expected U.S. data, weighing on EUR/USD.
Markets were driven by risk aversion as investors weighed the economic growth risks of a longer-term increase in U.S. federal funds rates and an impending U.S. government shutdown. Traders will be watching comments from Federal Reserve Chairman Jerome Powell this week for new catalysts. Hawkish comments from Fed officials could limit the dollar’s upside and boost the euro.
Market participants are awaiting preliminary September inflation readings from Spain and Germany. In addition, Eurozone consumer and business confidence data will be released on Thursday. In the United States, data on the number of Americans filing initial jobless claims last week, the third revised second-quarter gross domestic product and existing home sales will be released on Thursday. Focus will turn to Friday’s release of the core U.S. personal consumption expenditures (PCE) price index. The U.S. core personal consumption expenditures (PCE) price index is expected to fall to an annual rate of 3.9% from 4.2%. Traders will look to the data for clarity on EUR/USD direction.
