EUR/USD Holds Steady Around 1.1100, Near 8-Month High

During the Asian session on Tuesday, the euro fell from an eight-month high of 1.1087 against the dollar and is currently trading around 1.1080. The euro fell against the dollar as the market maintained risk aversion and the dollar strengthened. However, the dollar may be in trouble as the chances of a 25 basis point interest rate cut by the Federal Reserve in September increase.

Interest rate markets are pricing in a 23.5% chance of a 50 basis point rate cut, compared with a 76.5% chance of a 25 basis point rate cut in September, according to the CME Group’s FedWatch Tool.

Minneapolis Federal Reserve President Neel Kashkari said on Monday that it would be appropriate to discuss the possibility of an interest rate cut in September due to concerns about labor market weakness, Reuters reported.

The Jackson Hole Economic Symposium opens on Thursday, marking the start of a multi-day meeting of central bankers. Federal Reserve Chairman Powell is about to deliver a speech in Jackson Hole on Friday, and the market focus is on his speech.

In the Eurozone, markets are awaiting key data on business activity and consumer prices that could influence the European Central Bank’s (ECB) decision in September. Investors expect the European Central Bank to gradually lower interest rates. European Central Bank policymakers are hesitant to decide on a specific path to cut interest rates amid concerns that price pressures could reaccelerate.

EMU’s Harmonized Index of Consumer Prices (HICP) data and Germany’s Producer Price Index data will be released on Tuesday. These data may provide signals for the path of the European Central Bank’s interest rate policy.

Shaun Osborne, chief FX strategist at Scotiabank, said the euro/dollar’s latest hit to a new high just above 1.1050 reflected a broader decline in the dollar, while other factors were minimal.

EUR latest articles

Popular exchange rates

foreign exchange

fxcurrencyconverter is a forex portal. The main columns are exchange rate, knowledge, news, currency and so on.

© 2023 Copyright fxcurrencyconverter.com