Home›Forex›Major Pairs›Euro firms above 1.1550 as Fed hike odds fade

Euro firms above 1.1550 as Fed hike odds fade

EUR/USD was near 1.1580 early Wednesday, with expectations for a September rate hike shifting toward a Fed hold after softer US inflation and retail sales data.

Reported · Written up by our desk · Major Pairs

FXStreet reports that EUR/USD rose modestly in early Asian trading, holding gains above 1.1550 and around 1.1580 as the US dollar weakened versus the euro. The move was linked to softer US inflation data that reduced expectations for tighter Federal Reserve policy.

The outlook for the next Fed decision also shifted after July data that included unexpected job losses, along with weaker consumer price inflation and retail sales. In market pricing, odds for a September quarter-point hike flipped toward roughly 65% for a Fed hold, according to a Reuters poll cited in the story.

FXStreet also notes traders are looking ahead to European Central Bank President Christine Lagarde’s speech later Wednesday for direction. In the euro zone, the article says markets are pricing a continuing ECB hiking path, with the ECB Watch Tool indicating a 90% to 94% chance of a 25 basis point hike to 2.50% at the September 9 meeting.

Elsewhere, the story says the US-Iran conflict has entered its sixth month, with potential safe-haven demand for the dollar acting as a headwind for EUR/USD. It adds that Germany survey data helped support the euro, with the August ZEW expectations component rising above consensus, while strategists described the euro as resilient despite limited change on the session.

Latest closeEUR/USD 1.157 ▲0.4%

More like this

Sources