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Euro trades near 1.1580 as US dollar holds on Fed expectations

EUR/USD is down 0.1% on the day near 1.1580, after softer ADP data and easing Treasury yields narrowed the dollar’s gains ahead of Friday’s Nonfarm Payrolls.

Reported · Written up by our desk · Major Pairs

EUR/USD is consolidating its losses during US trading hours, holding around 1.1580 and down 0.1% on the day, as the US dollar stays supported by hawkish expectations for the Federal Reserve, despite some softening in US economic data. FXStreet reports that weaker-than-expected ADP Employment Change pointed to slowing hiring, with US private-sector payrolls rising 38K in August versus expectations of 47K, and with a prior month increase revised up to 46K. The data, along with a modest pullback in Treasury yields, limited the dollar’s advance.

Treasury yields eased across the curve, but the 10-year yield remained close to recent highs near 4.78% after briefly touching 4.81%, according to the report. The US Dollar Index was around 99.74 after reaching a two-week high near 99.87.

The near-term rate outlook is also backing the dollar, with CME FedWatch showing about a 70.0% probability of a September 15 to 16 rate hike, up from 36.0% a week earlier. FXStreet also cited escalating US-Iran tensions, which have lifted oil prices and kept inflation concerns elevated, while the ECB is widely expected to raise its deposit rate by 25 basis points to 2.50% at its September 9 to 10 meeting.

Latest closeEUR/USD 1.159 ▼0.1%|Dollar index 99.58 ▼0.1%

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