Euro gains as receding Fed hike bets weigh on USD; geopolitical risks cap upside
The EUR/USD pair attracts some follow-through buyers during the Asian session on Friday and looks to build on the previous day's modest bounce from the vicinity of the 1.1500 psychological mark, or an over one-week low.
The EUR/USD exchange rate experienced a brief recovery during Friday's Asian trading session, reaching a two-week low of 1.1550. This gain was driven by reduced expectations of a Federal Reserve rate hike, which kept the US Dollar depressed. The Euro benefited from market confidence that the European Central Bank would implement a final 25-basis-point rate hike at its September meeting, as inflation remained above the 2% target.
Geopolitical risks, including NATO's interception of a drone over Latvia and increased tensions between Russia and NATO members, prevented the Euro from making a more significant advance. Despite these concerns, analysts noted a modest bullish sentiment for the Euro/US Dollar pair, as it traded above the 200-period Exponential Moving Average. However, a breakout above the 1.1565 level would be required for sustained gains.
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