EUR/USD shows signs of recovery on Thursday, reflecting a gain of 0.45% after rebounding from daily lows of 1.1486, attributed to a weakening of the Greenback. The recent soft jobs data in the US has heightened speculation regarding a potential Fed rate cut at the upcoming December meeting. The currency pair is currently trading at 1.1545 as of this moment.
The EUR/USD pair has increased by 0.45%, reaching 1.1545 after bouncing back from daily lows around 1.1486, influenced by a general decline in the USD. The Challenger report indicates that there were 150,000 job cuts in the US during October, marking the most significant monthly decline in two decades. Federal Reserve officials continue to express a dovish to neutral stance as market participants adjust their expectations for an increased likelihood of a rate cut in December.
> The Euro has strengthened, moving above 1.15, as disappointing US employment data and concerns over a government shutdown negatively impact sentiment towards the Dollar : The ongoing US government shutdown has traders relying on private companies to release economic data, mirroring the situation observed throughout the day. The Challenger report indicated that employers reduced their workforce by more than 150,000 jobs in October, marking the most significant decline for the month in two decades. As a result, money markets adjusted their expectations regarding the Fed’s potential to maintain an accommodative policy stance during the December meeting. A group of Federal Reserve officials made headlines, spearheaded by regional Fed Presidents Beth Hammack, John Williams, and Austan Goolsbee. Furthermore, Fed Governors Stephen Miran and Michael Barr maintained their dovish and neutral positions, respectively. In Europe, Retail Sales for the Eurozone fell short of expectations for a 0.2% MoM increase, contracting by 0.1%. In the twelve months leading up to September, sales decreased from 1.6% in August to 1% year-over-year.
Latest FX Rate Trends : Euro experiences a significant rise due to the weakness of the US Dollar
- The US Dollar Index, which measures the performance of the American currency against six others, has decreased by 0.42%, now standing at 99.73.
- Beth Hammack stated that it is “not obvious” the Fed should cut rates again in light of current inflation levels, emphasizing that financial conditions continue to be accommodative. She noted that although the labor market seems fragile, she anticipates a decrease in the unemployment rate.
- Fed Governor Michael Barr stated that inflation progress has been made “but there is still work to do,” highlighting the necessity for the central bank to maintain a robust job market.
- John Williams stated that identifying the natural rate of interest poses challenges, with model-based estimates for the US neutral rate currently around 1%.
- Austan Goolsbee noted that the absence of official inflation data amid the government shutdown “accentuates” his caution regarding further rate cuts.