|

Euro weakens for second day, Greenback rebounds on Fed guidance and strong US data

  • EUR/USD extends losses for a second day as the US Dollar firms.
  • The US Dollar Index rebounds to 97.50 after briefly touching fresh year-to-date lows at 96.22 post-Fed.
  • Stronger US data added to Dollar momentum as Jobless Claims fell to 231K, while the Philadelphia Fed index surged to 23.2.

The Euro (EUR) trades on the back foot against the US Dollar (USD) on Thursday, with EUR/USD extending its decline for the second straight day as renewed Greenback strength weighs on the pair.

At the time of writing, EUR/USD is trading around 1.1784, down nearly 0.25% on the day. Meanwhile, the US Dollar index, which tracks the value of the Greenback against a basket of six major currencies, is edging higher after reversing sharply from fresh year-to-date lows of 96.22 touched in the immediate aftermath of the Federal Reserve’s (Fed) interest rate decision. The index is now hovering near 97.50.

On Wednesday, the Fed delivered its first rate cut since December, lowering the federal funds rate by 25 basis points to the 4.00%-4.25% range. While the move was widely expected and largely priced in, markets quickly shifted focus to the updated dot plot and Fed Chair Jerome Powell’s press conference.

The median dot for 2025 interest rates drifted lower, implying around 50 bps of additional easing by year-end to a target range of 3.50-3.75%, though a sizable minority of officials saw just one or no more cuts. Projections for 2026 and 2027 shifted lower as well, pointing at 3.4% and 3.1%, respectively, before stabilizing at 3.0% in the longer run.

At his press conference, Fed Chair Powell described the decision as a “risk management cut,” stressing that monetary policy is “not on a preset course” and will be guided “meeting by meeting.” He underlined that the balance of risks has shifted compared with earlier this year, with softer employment offsetting lingering inflation pressure. While reiterating the Fed’s commitment to restoring inflation to 2%, Powell emphasized there was “no widespread support” for a larger 50 bps cut and said the central bank does not feel the need to move quickly on rates.

Powell’s cautious tone helped the US Dollar rebound as traders scaled back expectations for a rapid easing cycle. Thursday’s US economic releases added to the Dollar’s momentum. Initial Jobless Claims fell to 231K in the week ending September 13, better than the 240K expected, while the previous week was revised higher to 264K from 263K. In addition, the Philadelphia Fed Manufacturing Survey for September surged to 23.2, sharply above the 2.3 expected and a rebound from -0.3 in August.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD0.24%0.66%0.67%0.21%0.58%1.34%0.35%
EUR-0.24%0.30%0.42%-0.01%0.33%1.20%0.13%
GBP-0.66%-0.30%0.12%-0.32%0.02%0.82%-0.16%
JPY-0.67%-0.42%-0.12%-0.46%-0.15%0.65%-0.28%
CAD-0.21%0.01%0.32%0.46%0.36%1.27%0.15%
AUD-0.58%-0.33%-0.02%0.15%-0.36%0.90%-0.19%
NZD-1.34%-1.20%-0.82%-0.65%-1.27%-0.90%-0.96%
CHF-0.35%-0.13%0.16%0.28%-0.15%0.19%0.96%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Author

Vishal Chaturvedi

I am a macro-focused research analyst with over four years of experience covering forex and commodities market. I enjoy breaking down complex economic trends and turning them into clear, actionable insights that help traders stay ahead of the curve.

More from Vishal Chaturvedi
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD: Bulls pray for a dovish Fed

EUR/USD has finally taken a breather after a pretty energetic climb. The pair broke above 1.1680 in the second half of the week, reaching its highest levels in around two months before running into some selling pressure. Even so, it has gained almost two cents from the late-November dip just below 1.1500 the figure.

GBP/USD trims gains, recedes toward 1.3320

GBP/USD is struggling to keep its daily advance, coming under fresh pressure and retreating to the 1.3320 zone following a mild bullish attempt in the Greenback. Even though US consumer sentiment surprised to the upside, the US Dollar isn’t getting much love, as traders are far more interested in what the Fed will say next week.

Gold: Bullish momentum fades despite broad USD weakness

After rising more than 3.5% in the previous week, Gold has entered a consolidation phase and fluctuated at around $4,200. The Federal Reserve’s interest rate decision and revised Summary of Economic Projections, also known as the dot plot, could trigger the next directional move in XAU/USD. 

Week ahead: Rate cut or market shock? The Fed decides

Fed rate cut widely expected; dot plot and overall meeting rhetoric also matter. Risk appetite is supported by Fed rate cut expectations; cryptos show signs of life. RBA, BoC and SNB also meet; chances of surprises are relatively low. Dollar weakness could linger; both the aussie and the yen best positioned to gain further. Gold and oil eye Ukraine-Russia developments; a peace deal remains elusive.

Week ahead – Rate cut or market shock? The Fed decides

Fed rate cut widely expected; dot plot and overall meeting rhetoric also matter. Risk appetite is supported by Fed rate cut expectations; cryptos show signs of life. RBA, BoC and SNB also meet; chances of surprises are relatively low.

Ripple faces persistent bear risks, shrugging off ETF inflows

Ripple is extending its decline for the second consecutive day, trading at $2.06 at the time of writing on Friday. Sentiment surrounding the cross-border remittance token continues to lag despite steady inflows into XRP spot ETFs.