EUR/USD slips below 1.0900 on soft US jobless claims
The post EUR/USD slips below 1.0900 on soft US jobless claims appeared on BitcoinEthereumNews.com.
EUR/USD falls sharply as the US Dollar recovers after lower US Initial Jobless Claims. Investors see the Fed cutting interest rates aggressively this year. The ECB is expected to reduce its key borrowing rates two times more by the year-end. EUR/USD slumps below 1.0900 in Thursday’s American session. The major currency pair weakens as the US Dollar (USD) recovers strongly on soft United States (US) Initial Jobless Claims data for the week ending August 2. Individuals claiming jobless benefits for the first time came in lower at 233K than estimates of 240K, and the prior release of 249K. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, bounces back to near 103.40. While the near-term outlook of the shared currency pair remains uncertain as investors are confident that the Federal Reserve (Fed) will choose an aggressive monetary policy stance to tame upside risks to potential United States (US) economic slowdown. According to the CME FedWatch tool, 30-day Federal Funds futures pricing data shows that traders see 50 basis points (bps) cut in interest rates in September as imminent. The data also suggests that the Fed will reduce its key borrowing rates by more than 100 bps this year. Meanwhile, market participants have also anticipated that the Fed could announce emergency rate cuts as the US economy is exposed to a recession. On the contrary, Economists at Goldman Sachs wrote in a note, “So while market stress is noticeably higher than a week ago, our Financial Stress Index (FSI) suggests that there have been no serious market disruptions to date that would force policymakers to intervene.” Market speculation that the Fed would deliver hefty rate cuts was bolstered by upside risks to job growth and a sharp contraction in the manufacturing sector. For more cues on the current labor market status, investors will focus on the Daily digest market…
Filed under: News - @ August 8, 2024 11:24 pm