During the American session on Wednesday, the EUR/USD fell toward 1.0600. Due to the US Dollar’s rise after the ISM Manufacturing PMI report, the pair seems to be getting weaker before the FOMC minutes come out.

Even though the US Dollar went down, the EUR/USD pair made up half of what it lost on Tuesday. Most of the USD’s competitors have improved, leaving the EUR one of the worst. After reaching 1.0635, EUR/USD trades just above 1.0600.

During Asian trading, government bond yields dropped sharply, putting pressure on the Dollar. The Australian Dollar went up when it was reported that China might partially lift its ban on coal imports. The Japanese Yen went up when it was reported that the Bank of Japan (BoJ) cut the yields on government bonds and that Governor Haruhiko Kuroda said they would continue to loosen monetary policy to reach their inflation goal. The news made US Treasury yields go down. Before the US market opens, the 10-year note yields 3.69 per cent, which is a decrease of 10 basis points.

S&P Global put out PMIs for December. The PMI for German services went up to 49, and the PMI for the Euro Zone went up to 49.8. It shows that the EU has recovered. Reports say that price pressures were high but not as high as recently. When good news came out, it helped the EUR.

On the US macroeconomic calendar, the December ISM Manufacturing PMI will drop from 49 to 48.5. In the afternoon, the FOMC will also release the minutes from its last meeting on monetary policy. US policymakers raised their expectations for inflation and hinted at more rate hikes in December, which went against what the market thought would be the end of the tightening cycle.

Conclusion

At 1.0713, the upside might stop.