The US dollar climbed to a three-week high against the euro today, supported by upbeat labour market data in the United States. The single European currency was losing around 0.3 percent against the dollar shortly after 17:00 CET, hovering near $1.1035.
New jobs
The ADP organization reported today that private employers in the United States created 143,000 new jobs in September, more than expected. Investor attention now turns to Friday’s government report on September job creation in both the private and public sectors.
The favourable labour market data supports expectations that the US Federal Reserve (Fed) will cut interest rates by only a quarter of a percentage point at its November meeting. The bank began cutting interest rates last month when it reduced its benchmark rate by half a percentage point to a range of 4.75 to 5.00 percent.
Euro’s fall
The US currency is also now benefiting from the conflict between Israel and Lebanon’s Hezbollah movement. Investors typically use the dollar as a safe haven in times of economic or political uncertainty.
Adding to the euro‘s decline is the growing expectation that the European Central Bank (ECB) will move to cut interest rates further this month. Preliminary data from statistics office Eurostat on Tuesday showed that the annual inflation rate in the eurozone fell to 1.8 percent in September from 2.2 percent in the previous month. It fell below the ECB’s 2 percent target for the first time since mid-2021.
Source: ÄŒTK
