The post EUR/USD pressured as USD gains traction on uneven data and Fed divide appeared com. EUR/USD posts moderate losses during the North American session on Friday as the US Dollar (USD) holds firm after the release of mixed economic data and dovish comments by Federal Reserve (Fed) officials. The pair trades at 1. 1504, down 0. 20%, after hitting a two-week low of 1. 1491. Euro retreats 0. 20% as weak US sentiment contrasts with firmer PMIs, markets rise December cut odds Data in the US was mixed, yet the economy shows signs of resilience. The S&P Global Manufacturing and Services PMIs were mixed in November but revealed that business confidence had improved. Other data showed that American households turned pessimistic about the economic outlook, according to the University of Michigan (UoM) Consumer Sentiment for November. Sentiment hit its lowest level since 2009, as consumers remain frustrated about high prices and weakening incomes. After the data, the EUR/USD’s reaction was muted, as traders digested mixed comments from many Federal Reserve officials. Dovish comments from New York Fed President John Williams and Governor Stephen Miran boosted investor expectations for a 25-basis-point rate cut at the December meeting. Conversely, Boston Fed President Susan Collins and Dallas Fed President Lorie Logan argued for maintaining a restrictive policy stance, signaling support for keeping rates unchanged. Given the backdrop, market participants had priced in a 71% chance of a December rate cut, a sharp jump from around 31% earlier in the day. Daily market movers: Euro’s tumble despite Fed’s dovish tilt New York Fed President John Williams said policymakers could still cut rates in the “near-term,” a remark that lifted market odds for a December move. Echoing that tone, Fed Governor Stephen Miran said that Thursday’s Nonfarm Payrolls data supports a December rate cut, adding that if his vote were decisive, he “would vote for a 25-bps cut.” On the other side, Dallas Fed.
Tag: 25-basis-point
GBP/USD rebounds as traders twist strong NFP into fresh Fed-cut hopes
The post GBP/USD rebounds as traders twist strong NFP into fresh Fed-cut hopes appeared com. The Pound Sterling (GBP) advances during the North American session on Thursday following the release of a stellar Nonfarm Payrolls (NFP) report for September, which revealed the economy added more people to the workforce than expected. At the time of writing, GBP/USD trades at 1. 3117 after reaching a daily low of 1. 3038. Sterling trims losses as robust NFP and firmer labor signals lift December Fed cut expectations, while softer UK data weighs The US Bureau of Labor Statistics (BLS) revealed that 119K jobs were created in September. At the same time, the Unemployment Rate edged up from 4. 3% to 4. 4%, though it remained below the Federal Reserve’s projection of 4. 5% for 2025. The Department of Labor also revealed Jobless Claims for the week ending November 15 came at 220K, its lowest level since September, an indication that the labor market, despite softening, remains stable. After the data, the CME FedWatch Tool showed that investors priced a 43% chance of a 25-basis-point rate cut, up from 29% before the NFP release. Cleveland Federal Reserve (Fed) Beth Hammack said that easing monetary policy now could encourage financial risk-taking. “Cutting rates risks prolonging high inflation,” she said, and added that “financial conditions are quite accommodative right now.” Recently, Fed Governor Michael Barr said that he is concerned about inflation still at 3%, leaning hawkish. In the UK, headline and core inflation edged lower and could push Bank of England (BoE) Governor Andrew Bailey to opt for a rate cut at the December meeting. Data-wise, UK Consumer Confidence tumbled ahead of Chancellor Rachel Reeves’ budget. The British Retail Consortium said that as the government hints at higher income tax in this month’s budget, people are worried about the economy and their personal finances, according to Bloomberg. Therefore, further GBP/USD downside is expected, as central.
AUD/NZD hovers around 1.1550 following cautious remarks from RBA’s Hauser
The post AUD/NZD hovers around 1. 1550 following cautious remarks from RBA’s Hauser appeared com. AUD/NZD remains flat after registering more than 0. 25% losses in the previous session, trading around 1. 1550 during the Asian hours on Wednesday. The currency cross remains near 1. 1590, the highest since September 2013, reached on November 10. The Australian Dollar (AUD) may rise against its peers due to cautious sentiment surrounding the Reserve Bank of Australia (RBA) policy outlook. RBA Deputy Governor Andrew Hauser said on Wednesday, “Our best estimate is that monetary policy remains restrictive, though the committee continues to debate this.” Hauser added that if policy is no longer mildly restrictive, it would have significant implications for future decisions. On the data front, the University of Melbourne released on Tuesday that Australia’s Westpac Consumer Confidence jumped 12. 8% in November to 103. 8, surpassing 100 for the first time since February 2022. The rebound follows a 3. 5% decline in October and marks the strongest non-pandemic reading in seven years, driven by improving economic conditions and easing external risks. The AUD/NZD cross may continue its winning streak as the New Zealand Dollar (NZD) struggles amid the increasing likelihood of a 25-basis-point rate cut to 2. 25% by the Reserve Bank of New Zealand (RBNZ) in November. Markets also price in a 10% chance of a deeper 50-basis-point cut, amid rising job losses and the economy edging toward a second recession. The dovish sentiment surrounding the RBNZ policy outlook increased following the release of the RBNZ Inflation Expectations on Tuesday, which remained consistent at 2. 28% for the quarter-over-quarter (QoQ) in the fourth quarter, within the 1%-3% target range. RBA FAQs The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price.