By Chibuike Ojoh and Alun John
NEW YORK/LONDON (Reuters) – The US dollar stabilized against major currencies on Friday as markets absorbed a large number of economic data that supported the current monetary policy path of the Federal Reserve (US central bank).
The Labor Department reported that its U.S. producer price gauge was unchanged in September, the latest economic data to suggest the Federal Reserve is likely to cut interest rates again next month.
Consumer prices in September rose 0.3%, according to data released Thursday, slightly higher than expected, while weekly unemployment claims rose, indicating a weak labor market. Weekly unemployment claims data was skewed by Hurricane Helen. Next week’s data will be affected by Hurricane Milton, the second hurricane to hit the southeastern United States in two weeks
The euro stabilized at $1.1093, the pound sterling rose 0.08 percent to $1.3072, while the dollar rose 0.35 percent against the Japanese yen to 149.12 yen.
The euro was flat at 102.91, catching a breath after a recent steady rise that took it above 103 on Thursday, its highest level since mid-August on the back of traders reducing their bets on more big interest rate cuts by the Federal Reserve at its remaining meetings. this year.
Markets are betting on a roughly 91% chance of a 25 basis point cut in interest rates at the Federal Reserve’s next meeting and a 9% chance of no cut, according to the Chicago Mercantile Exchange’s Fedwatch tool.
“This slightly higher inflation rate has really supported the market away from being overly aggressive about how deeply they will look for interest rate cuts by the end of the year,” said Amarjit Sahota, CEO of Klarity FX in San Francisco. . “So there was actually an overpricing, and that has basically been resolved this week.”
Britain’s economy grew in August after two straight months of recession, offering some respite to Finance Minister Rachel Reeves ahead of the new Labor government’s first budget later this month.
However, in addition to being broadly stable against the dollar, the pound was little changed against the euro at 83.67 pence in the single currency.
Traders are also watching French politics, after the government on Thursday delivered its 2025 budget with plans to cut spending by 60 billion euros ($65.5 billion) and raise taxes on the wealthy and big companies to address a growing fiscal deficit.
The budget is unlikely to be approved before December, as French Prime Minister Michel Barnier and his allies in President Emmanuel Macron’s camp lack a majority by a wide margin, and will have no choice but to accept many concessions.
Markets are also awaiting a press conference from the Chinese Ministry of Finance on fiscal policy on Saturday. The dollar strengthened 0.22% to 7.067 against the dollar.
The Australian dollar rose 0.22% against the US dollar to US$0.6753, while the New Zealand dollar reached US$0.611 after the central bank on Wednesday cut interest rates by half a point and hinted at more cuts in the future.
In cryptocurrencies, Bitcoin rose 5.38% to $62,930.00. It rose 3.8% to $2,456.70.
“The market is satisfied because there is nothing really countering the narrative that the Fed is cutting rates; the only debate is how quickly the Fed will cut,” said Stephen Englander, head of global G10 currency research at Standard Chartered Bank. 🙂 In New York.
“Overall, the data was a little encouraging of this narrative and none of the data dampened the narrative that the Fed is cutting interest rates.”
Currency offer prices on October 11 07:51 pm
GMT
Description RIC Last American Close Previous Session Percentage of Change in the Pct Ratio Since the Beginning of the Year to the Pct Ratio High Bid and Low Bid
Dollar index 102.91 102.89 0.02% 1.52% 102.99 102.76
EUR/USD 1.0935 1.0938 -0.02% -0.93% $1.0953 $1.0927
Dollar/Yen 149.13 148.58 0.36% 5.72% 149.28 148.51
EUR/JPY 1.0935 162.48 0.37% 4.79% 163.4 162.32
USD/Swiss 0.8572 0.8563 0.11% 1.86% 0.8585 0.856
GBP/USD 1.3068 1.3061 0.08% 2.72% $1.3082 $1.3042
USD/CAD 1.3759 1.3742 0.13% 3.8% 1.3785 1.3726
AUD/USD 0.6753 0.6742 0.19% -0.93% $0.6759 $0.6726
EUR/Switzerland 0.9374 0.9364 0.11% 0.95% 0.9387 0.9363
EUR/GBP 0.8367 0.8373 -0.07% -3.47% 0.8383 0.8365
NZD/USD 0.611 0.6095 0.27% -3.29% 0.6119 $0.6072
USD/Norway 10.6961 10.7222 -0.24% 5.54% 10.7637 10.6837
EUR/Norway 11.6971 11.7412 -0.38% 4.22% 11.772 11.694
USD/SWE 10.3693 10.3744 -0.05% 3% 10.4157 10.355
EUR/Sweden 11.3402 11.3617 -0.19% 1.93% 11.3883 11.3336