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04/07/24
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Weaker USD Supports Euro and Pound
On Thursday, the euro and the pound rose versus the US dollar after weak economic data from the U.S. pushed the greenback down the prior day, as voting in Britain began and the French election drew closer.
Sterling was last up slightly at $1.2757 after it gained 0.46% the prior day and reached a 3-week high, while the euro was up 0.1% at $1.0801, after on Wednesday gaining 0.4% and hitting a 3-week peak.
The pound is now higher for the year versus the dollar. This makes it 2024’s best-performing G10 currency.
On Wednesday, the dollar dropped on weaker-than-expected U.S. economic data, including a weak ADP employment report and services report showing the economy slowing, after last week’s increase in first-time applications for unemployment benefits.
Markets now predict close to 0.5% of Federal Reserve cuts in interest rates this year, most likely beginning with a 0.25% move in Sept. and a second by the end of the year. Those bets also pushed down U.S. Treasury yields.
Friday’s most important monthly U.S. labor market data, non-farm payrolls, will likely show a gain of 190K jobs in June after May’s rise of 272K, a poll of economists by Reuters showed.
On Thursday, markets in the U.S. are closed for the July 4 holiday.
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