Ella 
The EUR/USD rose above the 1.0600 level in early Asian trading on Tuesday. EUR/USD rose to its highest level in a month, supported by a pullback in the U.S. dollar. At the time of writing, the EUR/USD was down 0.01% on the day at 1.0670.
Meanwhile, losses in U.S. Treasuries have put selling pressure on the U.S. Dollar (USD). The 10-year U.S. Treasury yield hit 5.02% for the first time since 2007, but later reversed course and fell to 4.848%. The Dollar Index fell to a one-month low of 105.60.
On Monday, the preliminary Eurozone Consumer Confidence Index for October came in at -17.9, compared to the previous reading of -17.8, which was better than the expected reading of -18.3. In addition, economists polled by Reuters expect the ECB’s rate hike cycle to be over, but that easing will not begin until at least July 2024 as the fight against high inflation continues.
In U.S. Dollar news, the Chicago Fed National Activity Index came in at +0.02 in September, compared to the previous reading of -0.22. A reading of zero indicates that the economy is growing on trend. The Chicago Fed’s National Activity Index for September suggests that the U.S. economy is still some distance from recession.
The Federal Open Market Committee (FOMC) is entering a quiet period. Atlanta Fed President Raphael Bostic said on Friday that he does not expect the Fed to cut interest rates until the middle of next year. Philadelphia Fed President Patrick Harker reiterated his preference for holding rates steady. Cleveland Fed President Loretta Mester said that the Fed is “at or near the peak of its hiking cycle”. The market views a November rate hike as unlikely, but the probability of a January 2024 hike remains above 30%, according to the CME FedWatch tool.
Market participants will focus on the preliminary Eurozone PMI readings for October.
