EUR/USD THREATENS 200-DAY SMA AMID USD STRENGTH

EUR/USD dived more than 0.50% towards the 1.0810, near the 200-day SMA.

Hawkish remarks by Thomas Barkin and Susan Collins boosted the USD ahead of Powell’s speech on Friday.

Christine Lagarde will speak on Saturday.

On Thursday, the EUR/USD lost momentum and traded weak against the USD. Hawkish remarks made by Federal Reserve (Fed) officials gave the Greenback traction, while the European calendar had nothing relevant to offer. All eyes are now on. Jerome Powell and Christine Lagarde’s speeches on Friday and Saturday for fresh impetus.

On the US side, the USD gathered momentum following Susan Collins' remarks indicating the potential for further rate hikes, and the market sentiment shifted, leading investors to anticipate a more aggressive approach by the Federal Reserve (Fed). This sentiment was reinforced by Thomas Barkin's statement that the Fed would keep rates unchanged for the remainder of 2023 and consider rate cuts in 2024. As a result, US yields experienced an uptick and made the USD gain traction against its rivals.

Datawise, the US reported strong Jobless Claims from the second week of August, contributing to the rise of the US yields.

On the other hand, the European calendar had nothing relevant to offer on the data front, and the Euro recovered some ground against its rivals after trading weak on Wednesday. Investors' focus is set on Saturday’s speech by Christine Lagarde at the Jackson Hole Symposium, where they will look for further clues regarding forward guidance. As for now, World Interest Rates Probabilities (WIRP) suggest that markets continue to discount 25 basis points in September, October and December by the European Central Bank (ECB), which would take rates to 5%.