EUR/USD extends its losing streak for a fifth consecutive session on Thursday, falling toward a nearly two-week low around 1.1500 in European trading. The pair remains under pressure as the US Dollar (USD) strengthens across the board, supported by fading expectations of a Federal Reserve (Fed) rate cut in December.
At the time of writing, the US Dollar Index (DXY), which measures the Greenback against six major currencies, is holding firmly near a more than five-month high around 100.30.
Fed rate-cut bets fade after FOMC minutes
According to the CME FedWatch Tool, the probability of the Fed cutting interest rates by 25 basis points (bps) to 3.50%–3.75% in December has dropped sharply to 32.8%, down from 50.1% on Tuesday.
Traders trimmed dovish Fed bets after Wednesday’s release of the Federal Open Market Committee (FOMC) minutes for October, which showed many policymakers favored keeping rates unchanged in December, warning that premature easing could risk entrenching inflation expectations.
All eyes on us NFP for next policy signals
For further guidance on the Fed’s policy path, markets now await the United States (US) Nonfarm Payrolls (NFP) report for September, due at 13:30 GMT. The data will be a key driver for USD sentiment as Fed officials continue to highlight mounting downside risks in the labor market.
Euro pressured as risk appetite softens
The Euro (EUR) remains on the defensive as reduced Fed-dovish expectations dampen overall investor risk appetite. Looking ahead, the EUR will take cues from Friday’s preliminary HCOB Purchasing Managers’ Index (PMI) data for November, which could set the tone for the currency into the end of the week.
