EUR/USD Rebounds as Fed Hike Expectations Ease

The EUR/USD exchange rate has rebounded in recent days as expectations of a Federal Reserve interest rate hike have eased.

According to traders, the probability of a 25-basis-point increase now stands at around 50%, down from over 70% earlier in the week.

This shift has weakened the dollar's yield advantage and allowed EUR/USD to recover above 1.1600.

The US labor market report, due out today, is a key factor that could influence expectations further, with a weaker result potentially pushing the Fed towards a pause.