The common currency has been digesting the arguments for additional easing by the ECB, which include a lower than expected Eurozone CPI and contraction of German retail sales by 2.2%, which confirmed that the country’s economy is losing momentum. As a reminder, the German GDP contracted 0.1% in the second quarter. Weak numbers reinforce expectations for delivering additional stimulus measures during the upcoming ECB meeting this month.
The greenback accelerated the ascent as the US Treasury yields turned into a recovery mode as the US and China signaled readiness to resume the trade talks despite a fresh portion of mutual tariffs came into effect on September 1. In the short term, the pair will likely show a muted trading due to a Labor day in the US and lack of US economic data. Meanwhile, the US jobs report will be the key event for the pair this week.