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EUR/USD faces risk near 1.1323 to 1.1353 as Fed hike odds jump
FedWatch October hike odds rose to 69.7%, while the 2-year yield neared 4.9% and the 10-year pushed above 5.1%, pressuring EUR/USD toward the cited decision zone.
Action Forex reports that expectations for another Federal Reserve hike at the Oct. 28 meeting have surged to 69.7%, up from 55.4% a day earlier and 48.7% the week before, a repricing driven by a stronger US flash PMI release.
The move is being reflected in US Treasuries, with the 2-year yield around 4.89% and the 10-year yield above 5.10%, the latter at its highest level since 2007, alongside a record one-day jump for the 10-year on Wednesday.
As rates climbed, EUR/USD was pushed toward a structural decision zone at 1.1323 to 1.1353, with the outlet linking the shift to bond-market concerns about inflation. It cited manufacturing, services, and composite PMI increases, including composite PMI reaching a 62-month high.
Action Forex also tied the inflation signal to cost pressures, saying backlogs rose, hiring accelerated, capacity strains intensified, and input-cost inflation hit its highest since October 2022, with fuel and transport costs moving higher as oil prices rose. Brent settled up 3.86% at $103.08, reinforcing the inflation-bond connection.
Latest closeBrent $103.93 ▲3.7%|EUR/USD 1.122 ▼0.3%