- EUR/USD is trading with modest gains on Wednesday.
- US dollar remains muted, pushing the pair higher.
- Euro holds onto gains on mixed economic data.
The sluggish movement in the US dollar keeps EUR/USD on the higher side in the Asian session. The pair makes consolidated moves comprising a 15-pips movement.
At the time of writing, EUR/USD trades at 1.2184, up 0.11% up for the day.
The US Dollar Index (DXY), which tracks the performance of the greenback, sticks around the 90 level while paring early Asian gains. The US dollar is under the selling pressure post the dismal ADP data released in the previous week, which nullified the prospects of sooner than expected Fed tapering.
Market participants refraining from positioning themselves against the US dollar ahead of the inflation readings to be out on Thursday.
Meanwhile, the Biden administration voted to set up a ‘ strike force’ to look out for specific violations contributing to a “hollowing out” of supply chains. The market uncertainties push capital flows to the US dollar on its safe-haven bet.
On the other hand, the shared currency gained some traction following its mixed economic data and as investors awaited the ECB meeting on Thursday. The data showed the eurozone economy contracted less than the preliminary estimates, while disappointing data for Germany showed an unexpected deterioration in June’s investor’s morale and a decline in both industrial production and factory output for April.
As for now, the dynamics around the US dollar continue to play around the pair’s sentiment.
EUR/USD additional levels
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