- EUR/USD remains on the offer amid dollar rally.
- The greenback is drawing bids on global funding stress. ‘
- Recession fears and ECB’s QE program will likely keep the single currency under pressure.
EUR/USD reversed lower from 1.0980 during the Asian trading hours and is now trading in the red near 1.09.
The bounce from Wednesday’s low of 1.0818 ran out of steam, as the haven bid around the dollar strengthened, yielding big gains for the greenback against majors including anti-risk currencies like yen. Commodity dollars, in particular, took a beating with AUD/USD falling by nearly 300 pips to hit the lowest level since 2002.
Dollar is the king
“If cash is king, then dollar cash is the king of cash,” according to NDDFX’s Joseph Trevisani.
The American dollar could continue to gain altitude on global funding stress. After all, access to dollar liquidity is critical for the smooth functioning of the global financial system.
Euro, on the other hand, is unlikely to find buyers, on recession fears. Also, the European Central Bank’s decision to launch a fresh EUR 750 billion worth of QE program could keep the EUR buyers at bay.
On the data front, Eurozone’s Construction Output for January and the US weekly jobless claims are scheduled for release on Thursday. Traders could also take cues from the Philadelphia Fed Manufacturing Survey for March scheduled for release at 12:30 GMT.