© Reuters.
Investing.com – The US dollar fell in early European hours on Thursday as its recovery stalled, while the Australian dollar rebounded on strong employment data and the British pound remained weak.
At 03:05 ET (07:05 GMT), the greenback, which measures the greenback against a basket of six other currencies, was trading down 0.1% at 99.900 but still above Tuesday’s 15-month low.
Traders begin positioning for next week’s Federal Reserve meeting
The dollar remains weak, but traders are beginning to square positions ahead of next week’s meeting, when the central bank is widely expected to raise interest rates by 25 basis points.
However, the focus remains largely on whether the Fed will signal an extended pause in the rate hike cycle, given the recent softness in the Fed.
and address sparse data calendar thursday.
The British pound continues to fall
It fell 0.2% to 1.2916, continuing to ease after Wednesday’s decline of 0.7%, after UK inflation fell more than expected in June.
This release affected the market’s expectations of raising interest rates further from Egypt, with the possibility of British interest rates rising above 6%, from the current 5%, and is now likely to be off the table.
euro edges are higher; Uncertainty about the European Central Bank meeting in September
It rose 0.2% to 1.1217, after falling less than expected in June, adding to uncertainty surrounding the ECB’s interest rate outlook.
It is widely expected to raise interest rates again when it meets next week, but policymakers in recent days have taken a more dovish tone about what happens next.
In the eurozone it almost halved, down to 5.5% in June from a peak of 10.6% last October, prompting 35 of 75 economists polled by Reuters to predict no further increases, while 40 economists now see a rise of another 25 basis points in September.
The Australian dollar is rising on the back of strong employment data
It rose 0.7% to 0.6820 after data showed the Australian labor market expanded more than expected in June, rising by 32,600 from May, beating market expectations for an increase of 15,000.
This week’s signal suggested that the central bank is still thinking more, and a strong labor market could make such a move more likely.
Elsewhere, it fell 0.1% to 139.48 before next week’s policy meeting, while it fell 0.6% up to 7.1851, after reports of government intervention to support the troubled currency.