On Tuesday, September 28, by the end of the day, the euro fell by 0.10%, to 1.1684. The daily low is fixed at 1.1668. The dollar index climbed to 93.82, the highest level in more than 10 months.
The strengthening of the dollar was caused by the yield on 10-year Treasury bonds, which reached a three-month peak - it rose to 1.563%. In the American session, the negative came from the fall in stock indices amid comments about Jerome Powell and the prospect of a US default.
Senator Elizabeth Warren told the Fed chairman that she would not support him for a second term, criticizing his achievements in financial regulation and calling him a "dangerous man."
Jerome Powell and Janet Yellen both told Congress that a US default over a failure to raise the debt ceiling would be disastrous. Yellen informed everyone that the Treasury will run out of money on October 18th.
The fall in the EUR/GBP pair was contained by the sharp rise in the EUR/GBP pair. The euro rose in price against the British by 1.34% to 0.8641 amid the collapse of British bonds. UK assets faced a combination of inflation acceleration expectations accompanied by a slowdown in growth due to an expected tightening cycle. GBP/USD fell two figures to 1.3521 from 1.3717.
Scheduled statistics (GMT +3):
- At 12:00, the eurozone is to release an index of economic sentiment, consumer confidence and an index of business optimism in the industry for September.
- At 16:00 in Switzerland will be released the quarterly inflation report from the NBS.
- At 17:00, the US will announce a change in the volume of pending home sales for August.
- At 17:30 the US Department of Energy will publish a report on oil reserves.
- At 18:45, ECB President Lagarde, Bank of England Governor Bailey, Bank of Japan Governor Kuroda and Fed Chairman Powell will deliver speeches.
- At 21:00, FOMC member Rafael Bostic to speak
Current situation:
At the time of writing, the major currencies are showing mixed performance. Aussie, pound and Canadian traded in positive territory. Other currencies are trying to turn green too. The reason for the improvement in risk sentiment was the news from China.
Chinese developer Evergrande has announced that it will sell $ 1.5 billion in Shengjing Bank shares. The developer's shares on the Hong Kong Stock Exchange soared 11% to HKD 2.90.
Investors are fixated on the debt market (bonds), the fuel and energy crisis in Britain and Europe, the real estate developer Evergrande, the US debt ceiling, and the delta strain of the coronavirus. In addition to these factors, today the focus of traders will be the speeches of the heads of central banks.
Technical analysis
Futures on the SP & 500 index is trading in positive territory. Buyers are trying to develop an upward correction after a 17-day drop. Yesterday's rally in the cross was idle for euro-dollar buyers, as the price remained trading at 1.1685. The British fell 200 points and if a downward correction begins in the cross, the euro risks falling to 1.1650. It is even difficult to say here whether buyers will be able to stay at the current level with a large number of factors that are currently affecting the market.
Summary: the euro closed slightly lower on Tuesday as it received support from the rally in the EUR/GBP cross pair. Buyers' positions are very fragile, as a correction in the cross could plunge the euro to 1.1650. There is little hope of an increase in risk appetite due to positive news from China. If Europe supports the morning bounce, it is likely to see an upward correction today. And so the technical picture of the weakening of the single currency.