Dollar Strengthens as Fed Hike Chances Rise
The US Dollar remains firmly supported due to growing expectations of another Federal Reserve interest-rate hike. The EUR/USD pair hovers near a two-month low, trading around 1.1372 on Thursday.
Markets are increasingly anticipating a rate increase in October following last week's 25-basis-point (bps) rise. Wednesday's strong US PMI data and hawkish remarks from Fed officials have strengthened these expectations, with the CME FedWatch Tool placing the probability of a rate hike at around 65%, up from 55% a week ago.
The US labour-market figures showed that Initial Jobless Claims edged higher to 197K from 196K previously but came in below market expectations of 201K. Cleveland Fed President Beth Hammack emphasized the focus on inflation, stating 'Price stability is the responsibility of central banks.'