EUR/USD rebounds from weekly lows, looks to close around 1.1130
- Disappointing data from US keeps USD's gains in check.
- US Dollar Index looks to snap two-day winning streak.
- GBP's poor performance helps shared currency find demand.
The EUR/USD pair lost nearly 40 pips on Wednesday as the rising US Treasury bond yields helped the USD outperform its major rivals. Although the pair recovered modestly during the early trading hours of the European session, it lost its traction and touched its lowest level in a week at 1.1108.
However, the broad selling pressure surrounding the GBP after the Bank of England adopted a cautious tone in its monetary policy statement caused the EUR/GBP pair to gain traction and helped the shared currency find demand.
Additionally, the disappointing data from the US made it difficult for the USD to preserve its strength and supported the pair's recovery. The Federal Reserve Bank of Philadelphia's monthly report revealed that the economic activity in Philadelphia's manufacturing sector stagnated in December to revive fears of a slowdown in the US economic growth.
The US Dollar Index, which rose to 97.50 area earlier in the day, erased its gains and was last down 0.06% on the day at 97.35.
Eyes on GDP data
On Friday, the US Bureau of Economic Analysis is expected to keep its final estimate of the third-quarter Gross Domestic Growth unchanged at 2.1%. Moreover, the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred gauge of inflation, will be watched closely by the market participants as well. On the other hand, Current Account for October will be the only data release from the eurozone.
Technical levels to watch for