Euro Lifted by Fall in U.S. Rate Rise Expectations
Dow Jones
Aug 17
0737 GMT - The euro rises to a two-month high against the dollar, driven by a favorable shift in interest-rate expectations. The market has scaled back expectations for the Federal Reserve to raise interest rates this year whereas it is pricing an 83% chance that the European Central Bank will deliver another rate rise in September, LSEG data show. A further drop in short-dated U.S. rates is helping the euro reconnect with its short-term fair value in the $1.160-$1.1650 area, ING's Chris Turner says in a note. "Even though the euro is far from a high-yielder, it seems international investors like the eurozone as a diversification play against the U.S. AI boom." The euro rises to as high as $1.1611.
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