Ella 
EUR/USD broke its winning streak that began on Wednesday and came under pressure near 1.0530 during the Asian session on Monday. Risk aversion due to the Israeli-Palestinian military conflict has put downward pressure on the pair.
Christine Lagarde, president of the European Central Bank, told French newspaper La Tribune Dimanche: “The key interest rate of the European Central Bank has reached a certain level, and if it is maintained long enough, it will It will make a substantial contribution to the timely return of the inflation rate to the target.
Christine Lagarde expects to achieve her target of falling inflation back to 2%. Lagarde also cited confidence in Europe’s natural gas reserves.
German industrial production fell 2.0% year-on-year in August, compared with a 1.7% decline in the previous month. The monthly data showed a 0.2% decline, worse than expectations for a 0.1% drop.
Additionally, Friday’s US non-farm payrolls data also had an impact on the EUR/USD pair, initially weighing on it but ultimately ending the previous session on a positive note.
September’s jobs report showed a huge gain of 336,000 jobs, beating market expectations of 170,000 jobs. August’s figure was revised from 227,000. However, U.S. average hourly earnings (monthly rate) remained at 0.2% in September, missing expectations of 0.3%. On an annual basis, the report showed a decline of 4.2%, missing expectations of 4.3%.
Markets are paying close attention to the ongoing military conflict between Hamas and Israel in the Middle East. Markets continue to worry that the conflict could escalate and spread throughout the region, creating geopolitical uncertainty that could reverberate across global markets.
The U.S. dollar index (DXY) rebounded after three consecutive days of losses, driven by upbeat U.S. Treasury yields. At the time of writing, the U.S. Dollar Index is trading around 106.30.
U.S. Treasury yields rebounded on expectations that the Federal Reserve (Fed) will keep interest rates higher for an extended period. The 10-year Treasury yield is at 4.80% again, close to its peak since 2007.
Investors are expected to pay close attention to the upcoming International Monetary Fund (IMF) meeting, which will discuss strategies to stabilize international exchange rates and promote development.
In addition, the US core producer price index later this week will also be closely watched, as it plays a pivotal role in assessing domestic inflation trends and economic conditions in the United States.
Escalating violence has the potential to push investors toward traditional safe-haven assets, with the Swiss franc (CHF) being an obvious example. During periods of heightened geopolitical uncertainty, demand for safe-haven assets tends to increase, and in such circumstances, the Swiss franc is often considered a less risky option.
