- EUR/USD gains to near 1.1100 due to weakness in the US Dollar.
- The US Dollar faces a sell-off amid firm Fed September rate-cut bets.
- ECB Rehn sees market expectations for rate cuts in September as appropriate.
EUR/USD rises to a more than seven-month high near the round-level resistance of 1.1100 in Tuesday’s New York session. The major currency pair gains as the US Dollar (USD) continues to face a sheer sell-off, weighed by firm expectations that the Federal Reserve (Fed) will begin cutting interest rates in September.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, hovers near a seven-month low at around 101.80. Market speculation for Fed interest rate cuts has strengthened as officials seem to be more worried about the United States (US) labor market and remain confident that price pressures are on track to the 2% target.
On Monday, Minneapolis Fed Bank President Neel Kashkari cited concerns over signs of weakening labor market conditions and favored rate cuts in September. “The balance of risks has shifted, so the debate about potentially cutting rates in September is an appropriate one to have,” he said in an interview with The Wall Street Journal.
“If we saw some quicker deterioration in the labor market, then that would tell me, ‘well, we need to do more, quickly, to support the labor market, even if we have uncertainty about where our ultimate destination is going to be,” he added. However, Kashari pushed back expectations of the Fed’s jumbo rate cuts citing that layoffs remain low and higher jobless claims are not a sign of labor market deterioration.
For more cues on the interest rate path, investors will focus on the release of the Federal Open Market Committee (FOMC) minutes for the July meeting on Wednesday, and the Fed Chair Jerome Powell’s speech at the Jackson Hole (JH) Symposium, which will be held from August 22 to 24.
Daily digest market movers: EUR/USD rises further on US Dollar’s weakness
- EUR/USD exhibits strength amid weakness in the US Dollar. The Euro (EUR) outperforms the Greenback but is sluggish against other peers on expectations that the European Central Bank (ECB) could cut interest rates two more times this year. The ECB is widely anticipated to cut interest rates for the second time in its September meeting.
- This week, investors will focus on the preliminary Eurozone HCOB Purchasing Managers’ Index (PMI) data for August and Q2 Negotiated Wage Rates, which will be published on Thursday. Economists estimate that the Composite PMI barely improved amid the contraction in activities in the manufacturing sector. As for the Negotiated Wage Rate, a key measure of wage growth rose to 4.69% in the first quarter of this year and ECB officials would be pleased with a lower reading for the second quarter.
- The economic outlook of the Eurozone is vulnerable as its largest economy, Germany, struggles to maintain a firm footing due to poor demand from domestic and overseas markets. Amid downside risks to the Eurozone economic outlook, ECB policymaker and Finnish central bank chief Olli Rehn has shown comfort for market expectations pointing to rate cuts in September.
- In a speech to the European American Chamber of Commerce in New York, Rehn said: "The recent increase in negative growth risks in the euro area has reinforced the case for a rate cut at the next ECB monetary policy meeting in September, provided that disinflation is indeed on track," Reuters reported.
Euro Price Today:
Euro PRICE Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.
| EUR | USD | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| EUR | -0.05% | -0.15% | -0.15% | -0.16% | -0.05% | -0.49% | -0.38% | |
| USD | 0.05% | -0.09% | -0.09% | -0.12% | -0.01% | -0.74% | -0.32% | |
| GBP | 0.15% | 0.09% | 0.00% | -0.01% | 0.11% | -0.35% | -0.25% | |
| JPY | 0.15% | 0.09% | 0.00% | -0.02% | 0.07% | -0.37% | -0.27% | |
| CAD | 0.16% | 0.12% | 0.00% | 0.02% | 0.09% | -0.32% | -0.25% | |
| AUD | 0.05% | 0.01% | -0.11% | -0.07% | -0.09% | -0.43% | -0.38% | |
| NZD | 0.49% | 0.74% | 0.35% | 0.37% | 0.32% | 0.43% | 0.08% | |
| CHF | 0.38% | 0.32% | 0.25% | 0.27% | 0.25% | 0.38% | -0.08% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Technical Analysis: EUR/USD sets to break above 1.1100
EUR/USD turns sideways after rising to a fresh seven-month high near the round-level resistance of 1.1100. The major currency pair strengthened after a breakout of a channel formation on a daily time frame. Upward-sloping 20-day and 50-day Exponential Moving Averages (EMAs) near 1.0945 and 1.0880, respectively, suggest that the overall trend is bullish.
The 14-day Relative Strength Index (RSI) oscillates in the bullish range of 60.00-80.00, suggesting a strong upside momentum.
The immediate resistance for the Euro bulls would be the 28 December 2023 high at 1.1140. On the downside, the August 15 low at 1.0950 will be a key support area.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays below 1.1100 ahead of Fedspeak
EUR/USD is treading water below 1.1100 in the European session on Tuesday, sitting at an eight-month high of 1.1089. The pair struggles amid a steady US Dollar, as markets trade with caution ahead of Fedspeak.
GBP/USD clings to modest gains above 1.3000
GBP/USD consolidates its daily gains above 1.3000 in the second half of the day on Tuesday. Although the selling pressure surrounding the US Dollar seems to have eased, the pair manages to hold its ground as investors wait for the next catalyst.
Gold advances to new record high above $2,520
Gold extends its uptrend and trades at a fresh record high above $2,520 on Tuesday. The benchmark 10-year US Treasury bond yield stays in negative territory below 3.9%, allowing XAU/USD to continue to stretch higher.
Tether to launch USDT on Aptos blockchain
Aptos announced on Tuesday that Tether is launching its USDT stablecoin on the Aptos blockchain. This move is positive for Aptos as stablecoins such as USDT act as a bridge between the crypto assets and fiat currencies.
Canadian headline CPI matched estimates in July
According to a report from Statistics Canada on Tuesday, annual inflation in Canada, as indicated by the Consumer Price Index (CPI), held steady at 2.5% in July, falling short of market expectations.