Euro gains against US Dollar as Waller tempers Fed rate-hike bets
EUR/USD attracts buyers on Thursday as a sharp rally in the Japanese Yen (JPY), softer United States labour-market data and a pullback in US Treasury yields weigh on the US Dollar (USD). At the time of writing, EUR/USD trades around 1.1622, up roughly 0.30% on the day.
The Euro strengthened against the US Dollar on Thursday, buoyed by a surge in the Japanese Yen, subdued US labor market data, and a decline in US Treasury yields. The EUR/USD exchange rate rose to around 1.1622, marking a 0.30% increase for the day. Meanwhile, the US Dollar Index slipped to around 99.00, nearing a one-week low. The 10-year US Treasury yield fell for the second day in a row, settling at around 4.74%, down from 4.81%.
Fed Governor Christopher Waller's dovish remarks have dampened expectations of a rate hike this month. Waller noted signs of disinflation in recent data and stated that the September rate decision would depend on August inflation. He suggested that he would back keeping interest rates unchanged if the August data indicate recent progress.
The Fed's primary mandate is to achieve price stability and full employment, not financial conditions. The probability of a rate hike at the Fed's September meeting, as per the CME FedWatch Tool, has dropped to around 48% from 63% earlier. Despite mixed US economic data, traders are eagerly awaiting the upcoming Nonfarm Payrolls report for more insights into the Fed's monetary policy stance.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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