US Dollar Dominance Continues Amid US Economic Resilience
The US Dollar (USD) had another strong week, appreciating against most of its major rivals. The EUR/USD pair fell for a fourth consecutive week and traded as low as 1.1215 in May 2025. This week, it hovers around 1.1280.
US economic resilience is evident, with growth continuing, a healthy labor market, and stable inflation. A batch of first-tier macroeconomic data showed that annualized GDP growth was upwardly revised to 2.2% in Q2 from the previous estimate of 1.5%. The PCE Price Index, the Federal Reserve's preferred inflation gauge, came in softer than anticipated in August at 3.4%, down from 3.7% in July.
The US added a meager 29K new jobs in September, much worse than the 90K expected, according to the Nonfarm Payrolls report. However, annual wage inflation increased by 3% on a yearly basis, coming in below analysts' estimate of 3.2%. Soft figures were far from concerning, yet a less tight labor market leans towards lower interest rates.
The odds of a rate hike announcement on October 28 have decreased to around 21% from a peak above 70% in the previous week.