EUR/USD edges lower toward 1.1600 on dismal data, German growth outlook
- EUR/USD lost its traction after pushing higher in Asian session.
- Germany's Bundesbank warns against slowdown in activity in Q4.
- US Dollar Index turns positive on the day above 93.70.
The EUR/USD pair started the new week on a firm footing and rose toward the top of its weekly trading range before reversing its direction. As of writing, the pair was losing 0.2% on a daily basis at 1.1624.
Warning signs from Germany hurt EUR
The disappointing macroeconomic data releases from Germany and Bundesbank's worrisome growth outlook seems to be weighing on the shared currency.
The headline Business Climate Index of the IFO Survey for Germany declined to 97.7 in October from 98.9 in September. This reading fell short of the market expectation of 97.9. Additionally, the Expectations Index fell to 95.4 from 97.4. Meanwhile, Bundesbank said that the full-year growth in 2021 was likely to be significantly lower than the June forecast of 3.7% due to persistent supply chain issues and the loss of momentum in the service sector's business activity.
Germany's Bundesbank: Full-year growth to be significantly below June forecast of 3.7%.
On the other hand, the cautious market mood and rising US Treasury bond yields help the greenback find demand on Monday. The US Dollar Index, which declined to 93.50 area earlier in the day, is currently up 0.15% at 93.75. Later in the session, the Federal Reserve Bank of Chicago's National Activity Index and the Federal Reserve Bank of Dallas' Manufacturing Survey will be looked upon for fresh impetus.
Technical levels to watch for