🤯 Have you seen our AI stock pickers’ 2024 results? 84.62%! Grab November’s list now.Pick Stocks with AI

Dollar continues to fall; euro near multi-month high

Published 25/09/2024, 09:12
© Reuters
EUR/USD
-
GBP/USD
-
USD/JPY
-
AUD/USD
-
USD/SEK
-
USD/CNY
-

Investing.com - The U.S. dollar weakened Wednesday, adding to the previous session’s losses, with the euro benefiting despite signs of economic weakness in the eurozone. 

At 04:00 ET (09:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower to 100.080, after falling more than 0.5% in the previous session, its largest one-day percentage fall in a month.

Dollar continues to fall 

The U.S. dollar has struggled for friends after the Federal Reserve started its rate-cutting cycle with a hefty 50 basis-point reduction earlier this month.

Data on Tuesday showed U.S. consumer confidence unexpectedly fell in September, raising concerns about further growth in the largest economy in the world, especially as the labor market shows signs of contracting.

“In a surprise move yesterday, US consumer confidence was much weaker than expected,” said analysts at ING, in a note. “The market is very sensitive to this theme since the US consumer has been so resilient for so long.”

Markets are now pricing in a 59.5% chance of a 50-basis-point rate cut at the Fed's next policy meeting, up from just 37% a week ago, according to the CME FedWatch tool.

Euro close to 13-month high

In Europe, EUR/USD traded 0.1% higher to 1.1188, hovering near a 13-month high hit last month with the euro benefiting from the dollar weakness despite data pointing to economic weakness in the eurozone.

“There is very little on the European calendar today, so EUR/USD range trading looks likely. But the fact that EUR/USD is holding above 1.1100 is encouraging for modest EUR/USD bulls like ourselves,” added ING.

GBP/USD traded 0.1% lower to 1.3394, falling back from levels not seen since March 2022.

Sterling has received support as the Bank of England is widely seen as unlikely to be as aggressive with its rate cuts this year when compared to the Federal Reserve.

Bank of England's Megan Greene is set to speak later in the session, and her comments will be studied for further clues over the timing of monetary easing from the UK’s central bank.

USD/SEK rose 0.1% to 10.1041, ahead of the latest policy-setting meeting by Sweden's Riksbank.

The central bank is widely expected to cut rates by 25 basis points later in the day, but Riksbank Governor Erik Thedeen hasn’t taken the possibility of a half-point cut off the table.

Yuan close to record levels

USD/CNY traded 0.1% lower to 7.0238, falling close to its lowest level since May 2023 after Beijing announced a slew of stimulus measures on Tuesday, including a cut to banks’ reserve requirements, as well as lower mortgage rates.

USD/JPY rose 0.4% to 143.81, while AUD/USD fell 0.2% to 0.6878, just below a 19-month high after rallying sharply in the prior session.

Consumer price index data released on Wednesday showed inflation fell to a three-year low in August, while declines in core inflation were less pronounced. 

The RBA held interest rates steady on Tuesday, and said that while inflation was expected to fall in the near-term, it only expected price pressures to sustainably reach its target range by 2026.

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2024 - Fusion Media Limited. All Rights Reserved.