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EUR/USD Subdued as US Dollar Retains Upper Hand, Gold Can’t Shake Off the Blues

The US dollar, as measured by the DXY index, rose moderately on Thursday, touching seven-week highs near 104.70, as market sentiment remained fragile, depressing appetite for riskier currencies.

Against this backdrop, EUR/USD continued its descent, falling around 0.10% and breaking below the 1.0600 handle for the first time since early January. Gold prices also retreated, extending losses for the third consecutive session, and rapidly approaching the lowest level since December 30.

Looking ahead, there is reason to believe that the U.S. dollar could maintain leadership in the FX space, at least for some time, creating headwinds for both the euro and precious metals. This move is likely to be catalyzed by the continued rise in U.S. Treasury yields in response to the Federal Reserve’s assertive actions in its fight to restore price stability.

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