EUR/USD continues its downward streak for the fifth straight session, trading near 1.1515 on Thursday. The pair slipped after failing to hold levels close to 1.1600 on Wednesday. A stronger US Dollar, supported by hawkish Federal Reserve (Fed) Minutes and caution ahead of September’s Nonfarm Payrolls (NFP) report, has pressured the Euro.
The latest FOMC Minutes revealed that many Fed policymakers were against additional rate cuts, warning that easing too soon could weaken the fight against inflation and hurt confidence in the central bank. These remarks reduced expectations of back-to-back rate cuts in December.
According to CME FedWatch, the odds of a 25 bps cut at the December 10 meeting have fallen below 30%—down from 50% on Wednesday and above 90% a month ago. This shift has reinforced the US Dollar’s momentum.
In the Eurozone, Construction Output for September showed a deeper contraction. Later today, the European Commission will release November’s preliminary Consumer Confidence data, which may offer fresh direction for the Euro. In the US, markets are focused on the NFP report and the Philadelphia Fed Manufacturing Survey.
Daily Market Highlights: Dollar stays firm as Fed pause bets fade
-
The FOMC Minutes showed a divided Fed, with some members supporting steady rates while others rejected further cuts. The lack of fresh data following a 43-day government shutdown has also led traders to scale back rate-cut expectations, supporting the US Dollar.
-
In Japan, Finance Minister Satsuki Katayama said she did not discuss FX matters with BoJ Governor Kazuo Ueda. Markets took this as a sign that intervention is unlikely for now, pushing USD/JPY toward year-to-date highs.
-
The Euro failed to benefit from improved global risk sentiment despite Nvidia posting strong earnings, which calmed worries about overvalued tech and AI stocks and lifted Asian markets.
-
The delayed US NFP report is expected to show a 50,000 job gain for September, following August’s 22,000 increase. Average Hourly Earnings are projected to rise 0.3% MoM and 3.7% YoY. The Unemployment Rate is expected to stay unchanged at 4.3%.
-
The Philadelphia Fed Manufacturing Survey is forecast to show a smaller contraction, with the index seen at -3.1 compared to -12.8 in October.
-
Eurozone Construction Output dropped 0.5% in September after a revised 0.2% decline in August. Year-on-year output fell 0.3%, reversing part of the previous month’s 1% gain.
-
Later today, the EU Consumer Confidence Index for November is expected to improve slightly to -14.0 from -14.2 in October.
