Ekonomické zprávy
07.08.2024

European session review: USD appreciates as risk sentiment stabilizes

TimeCountryEventPeriodPrevious valueForecastActual
06:00GermanyTrade Balance (s.a.), blnJune25.323.520.4
06:00GermanyIndustrial Production s.a. (MoM)June-3.1%1.0%1.4%

USD rose against most of its major counterparts in the European session on Wednesday, as risk sentiments improved.

The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, increased 0.20% from the previous close to 103.17.

Markets’ assessment of recession risk increased sharply last Friday when the U.S. July labour market data came in weaker than anticipated, triggering a revision of expectations of the Federal Reserve’s policy moves.

According to CME FedWatch, markets now price in a 36.5% probability of a quarter-point interest rate cut at the U.S. central bank’s meeting next month and a 63.5% chance of a bigger - half-point - reduction. A week ago, a 25-basis-point rate decrease was seen as the most likely move for the Fed’s September meeting (88.1%). Overall, the Fed is expected to lower its rates to at least 4.25%-4.50% by the end of the year from the current 5.25%-5.50%.

Markets’ Fed rate bets are likely to face another test next Wednesday when the U.S. July CPI numbers are scheduled to come. 

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