EUR/USD Strengthens After Waller Hints at Interest Rate Cut
The euro/USD exchange rate strengthened moderately against the US dollar on Friday morning, driven by increased investor risk appetite and dovish comments from Federal Reserve officials. EUR/USD traded around 1.1615 after hitting a three-week low of 1.1555 on Thursday.
This increase occurred after Federal Reserve Governor Christopher Waller stated that the Fed should consider cutting interest rates soon, given the growing risks to the labor market and US economic growth. The comments, delivered in a speech on Thursday evening, immediately put pressure on the US dollar, considered a safe-haven asset.
Previously, the market was surprised by the release of stronger-than-expected US economic data. Retail sales rose significantly in June, while weekly jobless claims fell to a three-month low. Although this data initially supported the dollar, market participants now appear more focused on the future direction of monetary policy.
Market sentiment was also supported by the financial reports of several major companies, including Netflix, which posted quarterly results that exceeded expectations. This contributed to a global stock rally and weakened the US dollar's position in international markets.
Although the euro strengthened today, the EUR/USD pair still recorded a weekly decline of around 0.60%, marking its second consecutive negative week. Market participants now await the FOMC meeting at the end of July, which will determine the direction of the Fed's interest rate policy and the future movement of the US dollar.
Source: (ayu-newsmaker)
