The Euro has managed to steady itself against the US Dollar (USD), leading to a recovery in EUR/USD to the area above 1.0930 just to run out of steam afterwards and revisit the 1.0900 neighbourhood soon after the opening bell in Wall Street on Wednesday.
This earlier rebound in the pair can be attributed to renewed selling pressure on the Greenback, causing a corresponding reaction in the USD Index (DXY), which retreated toward the 103.00 neighbourhood. This movement in the index is occurring simultaneously with a mixed performance in the US bonds market, where yields in the belly and the long end of the curve now leave behind the early weakness and resume the uptrend vs. a small pullback in the short end.
Taking a broader perspective in terms of monetary policy, there haven't been any significant alterations. Investors are maintaining their anticipation that the Federal Reserve will maintain its current interest rates throughout the rest of the year. Conversely, the European Central Bank (ECB) is currently contending with internal disagreements within its Council regarding the continuation of its tightening measures after the summer period.
On the domestic front, another anticipated revision of the EMU GDP Growth Rate for the second quarter showed the economy is expected to have expanded 0.3% QoQ and 0.6% YoY, while Industrial Production in the bloc expanded 0.5% in June from a month earluer and contracted 1.2% over the last twelve months.
Turning attention to the United States' data landscape, the regular weekly MBA Mortgage Applications dropped 0.8% in the week to August 11, while Building Permits expanded 0.1% MoM in July (1.442M units) and Housing Starts increased at a monthly 3.9% in the same month (1.452M units). Additionally, Industrial Production expanded 1.0% MoM in July and contracted 0.2% over the last twelve months. Finally, the significant FOMC Minutes are expected to grab all the attention in the latter part of the NA session.