Ella 
During the European session on Thursday, the euro fell to around 1.0790 against the dollar. Key U.S. economic data due later in the North American session include the ISM Manufacturing Purchasing Managers’ Index and last week’s initial jobless claims, both of which came after U.S. Treasury yields recovered, leading to a stronger dollar (USD).
However, the dollar faces challenges due to dovish sentiment surrounding the Federal Reserve’s policy trajectory. The Federal Reserve decided to keep interest rates unchanged in a range of 5.25%-5.50% at its July meeting on Wednesday.
At the press conference after the interest rate decision, Federal Reserve Chairman Jerome Powell said that a rate cut in September was “sometimes possible” and that the Federal Open Market Committee (FOMC) did not want to make any commitments in the statement. Powell added that the central bank would keep a close eye on the labor market and remain alert for signs of a potential sharp downturn.
Across the ocean, Thursday’s data showed that the HCOB Eurozone Manufacturing Purchasing Managers’ Index (PMI) for July was 45.8, slightly above expectations and the previous value of 45.6. In addition, the Eurozone Harmonized Index of Consumer Prices (HICP) released on Wednesday increased by 2.6% year-on-year in July, compared with the previous value of 2.5%. 2.4% higher than market expectations.
The latest inflation report from the euro zone has raised doubts that the European Central Bank (ECB) may cut interest rates in September. With the European Central Bank less likely to cut interest rates at its Sept. 14 meeting, the euro may attract some buyers.
