Euro Rises as US Dollar Falls — Markets Expect Fed Rate Cuts Soon
The EUR/USD pair went up again, reaching around 1.1670, as the US Dollar kept getting weaker. The fall in the dollar comes because traders think the US Federal Reserve may cut interest rates later this year.
Right now, markets show a 94.6% chance that the Fed will cut rates by 0.50% before the year ends. Fed Chair Jerome Powell said the job market is slowing but didn’t confirm any plan for rate cuts yet.
Tensions between the US and China are also in focus. The US wants China to reduce its oil trade with Russia, and both countries are expected to meet soon in South Korea.
In Europe, French Prime Minister Sébastien Lecornu has delayed his pension reform until 2027, which helps reduce political worries in France. This is seen as a small positive for the euro.
Overall, a weaker dollar, rate cut hopes, and calm political news from Europe are all helping the euro stay strong.
Impact:
The euro might keep rising if the Fed cuts rates.
The US dollar could stay weak for some time, and EUR/USD may see more movement in the coming days.
