EUR/USD Stable as Markets Anticipate Fed Rate Cut
The EUR/USD currency pair held steady around 1.1660 on Friday in Asia, after posting gains in the previous three sessions. The euro's gains have the potential to continue as the US dollar is pressured by market expectations of a Federal Reserve interest rate cut in September.
According to the CME FedWatch monitoring tool, the probability of a 25 basis point interest rate cut is now at 93%, up from 48% a week ago. This increase was driven by US initial jobless claims data rising to 226,000 and the July jobs report indicating a weakening labor market.
On the monetary policy front, US President Donald Trump has appointed Stephen Miran to the Fed Board of Governors, replacing Adriana Kugler. Furthermore, Fed Governor Christopher Waller is emerging as a strong candidate to replace Jerome Powell as central bank chairman.
Meanwhile, the euro is gaining support as markets expect the European Central Bank (ECB) to refrain from further policy easing at its September meeting, with an 87% chance of keeping interest rates unchanged. The chance of the ECB cutting interest rates again before March 2026 is only around 60%. (ayu)
Source: Newsmaker.id
