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EUR/USD steadies after slipping from two-month high as Fed bets soften

EUR/USD was last around 1.1578, even as Eurozone ZEW sentiment jumped to 31.4 in August.

Reported · Written up by our desk · Major Pairs

EUR/USD is consolidating after easing from a two-month peak of 1.1614 reached the prior day, with the pair trading near 1.1578, FXStreet reports. The euro’s pullback comes as a firmer US dollar limits upside.

FXStreet points to a muted reaction to fresh data despite the Eurozone ZEW Survey improving sharply to 31.4 in August from 23.4, beating expectations of 25.4. In the US, the four-week average of ADP Employment Change rose to 9.5K for the week ending August 1, up from 8.25K previously.

Rising US Treasury yields are still supporting the dollar, the outlet says, but near-term dollar strength appears constrained as traders scale back Federal Reserve rate hike expectations. According to the CME FedWatch Tool, markets price roughly a 65% probability the Fed will leave rates unchanged next month.

FXStreet adds that uncertainty around inflation is heightened by the US-Iran standoff over the Strait of Hormuz, after Donald Trump said Washington is not seeking an extension of a memorandum with Iran that expired Monday. With the European Central Bank expected to raise rates in September, euro gains remain limited while oil price risks linger.

Latest closeEUR/USD 1.157 ▲0.4%

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