Euro Gains Against US Dollar Amid Receding Fed Hike Bets
The Euro has seen some gains against the US Dollar as bets on Federal Reserve interest rate hikes have receded. The EUR/USD pair, which has been trading in a two-week-old range, has managed to stay above the 1.1500 psychological mark.
This development comes after Thursday's US Producer Price Index (PPI) report showed inflation was lower than expected, giving the Fed room to hold interest rates steady and weighing on the USD.
However, geopolitical risks remain a concern, with NATO fighter jets shooting down a drone over Latvian airspace early Friday, and Russia downing 15 drones near its border with Finland and Estonia overnight. These developments have added to tensions in the region and favored USD bulls.
The European Central Bank (ECB) is expected to deliver one final 25-basis-point rate hike at its September meeting as inflation remains above the 2% target, lending support to the EUR/USD pair.