The euro rose to the highest level in one year against the dollar as currency traders bet US central bankers will reinforce the case for lower borrowing costs at the Federal Reserve’s Jackson Hole economic symposium.
The euro gained as much as 0.2% on Wednesday to 1.1148, its strongest level since July 2023. The European common currency gained against a majority of its peers in the Group of 10.
Its advance comes amid expectations that Fed Chair Jerome Powell on Friday will support bets that the central bank will cut interest rates by more than the European Central Bank in the coming months. Growth concerns in Europe have supported the case for further interest-rate cuts by the ECB. Traders are poring over data to get guidance on the amount of monetary easing.
This month, the euro is up 3% on a softer dollar as traders ramp up bets on Fed rate cuts.
“Dollar weakness is pushing the euro,” said Yusuke Miyairi, a currency strategist at Nomura International Plc. “But the fundamentals in the euro area, especially the region’s growth, aren’t necessarily supporting this move higher.”
The euro-area manufacturing survey for July may come in softer than expected on Thursday, according to Nomura. It will be “an important test” for the euro, Miyairi said.
The dollar was trading weaker on Wednesday after US payrolls were marked down by most since 2009 in the Bureau of Labor Statistics’ preliminary benchmark revision.
“After the weak July labor market data, the market is very alert to signs of weakness in the US,” said Kit Juckes, chief FX strategist at Societe Generale SA.
The euro may hold in the $1.10 to $1.12 range until the next US monthly payroll report in early September, he said.
With assistance from George Lei.
This article was generated from an automated news agency feed without modifications to text.