EUR/USD moves below 1.1700, downside seems limited due to dovish Fed tone
EUR/USD edges lower after registering around 0.5% gains in the previous session, trading around 1.1690 during the Asian hours on Monday. However, the pair may further regain its ground as the US Dollar (USD) could struggle, driven by prevailing dovish tone surrounding the US Federal Reserve’s (Fed) policy outlook for September.
Traders will likely observe the preliminary reading of the US S&P Global Purchasing Managers Index (PMI) data due later in the day.
US economic data keep the case for a September Federal Reserve (Fed) interest rate cut intact. Michigan Consumer Sentiment Index fell to 58.6 in August from 61.7 in July, falling short of the expected 62.0 reading.
Meanwhile, the US Retail Sales increased by 0.5% on a monthly basis in July, compared to a rise of 0.9% seen in June. This reading came in line with the market consensus.
Money markets are now pricing in nearly a 93% odds of a 25 basis points (bps) Fed rate cut in September, according to the CME FedWatch tool.
Source: FXstreet
