EUR/USD returns to 1.1060 area after spiking toward 1.11 on hawkish ECB commentary

• ECB's Knot says no need to resume QE program.
• US Dollar Index climbs higher toward 98.50 area.
• US economy expands by 2% in Q2 as expected.

The EUR/USD pair spiked to a session high of 1.1092 in the last hour after the shared currency gathered strength on the back of some hawkish comments from European Central Bank (ECB) Governing Council member Klass Knot. However, the broad-based USD strength didn't allow the pair to extend its rally and caused it to return to the lower half of its daily range. As of writing, the pair was trading at 1.1061, losing 0.15% on the day. 

ECB's Knot downplays stimulus needs

According to Bloomberg, Knot today argued that the ECB does not need to resume the Quantitative Easing (QE) program at this time and said that the market expectations for the ECB's September decision were "overdone."

On the other hand, recovering US Treasury bond yields amid rising hopes of the US-China trade conflict coming to an end before escalating any further today helped the Greenback outperform its major rivals. Additionally, in its recond estimate, the US Bureau of Economic Analysis reported that the economy was expected to expand by 2% in the second quarter of 2019. Although this reading was lower than the previous estimate of 2.1% it was in line with the market expectation.

At the moment, the US Dollar Index is at its highest level since August 23 at 98.42, adding 0.23% on a daily basis.

There won't be any macroeconomic data releases from the US in the remainder of the day and participants will wait for tomorrow's inflation data from the eurozone, which is expected to show the core Consumer Price Index (CPI) ticking higher to 1% from 0.9%.

Technical levels to watch for