The Euro (EUR) pared earlier gains against the US Dollar (USD) on Friday, as the US dollar was weighed down by the latest set of US economic releases. At the time of writing, EUR/USD is trading around the 1.1635 area, retreating from a daily high of 1.1628, although the pair is still on track for a second straight weekly gain as markets grow more confident that the Federal Reserve Bank (Fed) will cut interest rates next week.
The delayed release of the September US Personal Consumption Expenditures report kept the overall inflation picture flat. The core personal consumption expenditures index, the Fed’s preferred measure, rose 0.2% month-on-month, matching expectations, while the annual rate fell to 2.8% from 2.9%. The headline PCE rate stood at 0.3% monthly, matching expectations and remaining unchanged from the previous month. On an annual basis, the index came in at 2.8%, in line with expectations and slightly higher than 2.7% in August.
Outside of inflation, personal income rose 0.4%, beating expectations of 0.3%, while personal spending rose 0.3%, matching expectations and retreating from August’s gain of 0.5%.
The University of Michigan’s preliminary survey indicated an improvement in consumer sentiment heading into the end of the year. The Consumer Confidence Index rose to 53.3, above expectations of 52 and higher than the previous reading of 51. The Expectations Index also strengthened, reaching 55, above expectations of 51.2 and up from 51.
One-year inflation expectations fell to 4.1% from 4.5%, while the 5-year measure fell to 3.2% from 3.4%.
Meanwhile, labor data released earlier this week showed a mixed picture. ADP employment change fell by 32K in November, sharply missing expectations, while Challenger job cuts fell to 71.3K and initial jobless claims fell to 191K.
Taken together, flat inflation readings, easing consumer inflation expectations and softer employment signals strengthen the case for the Fed’s dovish stance. According to the CME FedWatch tool, markets are pricing in a roughly 87% probability of a 25 basis point rate cut at the monetary policy meeting on December 9-10.
US dollar price today
The table below shows the percentage change in the US Dollar (USD) against the major currencies listed today. The US dollar was the strongest against the Japanese yen.
| US dollars | euro | GBP | JPY | Canadian | Australian dollar | New Zealand dollar | Swiss franc | |
|---|---|---|---|---|---|---|---|---|
| US dollars | 0.10% | 0.03% | 0.19% | -0.66% | -0.27% | -0.06% | 0.18% | |
| euro | -0.10% | -0.07% | 0.09% | -0.76% | -0.38% | -0.16% | 0.07% | |
| GBP | -0.03% | 0.07% | 0.12% | -0.69% | -0.31% | -0.09% | 0.14% | |
| JPY | -0.19% | -0.09% | -0.12% | -0.84% | -0.46% | -0.25% | -0.02% | |
| Canadian | 0.66% | 0.76% | 0.69% | 0.84% | 0.38% | 0.59% | 0.83% | |
| Australian dollar | 0.27% | 0.38% | 0.31% | 0.46% | -0.38% | 0.22% | 0.48% | |
| New Zealand dollar | 0.06% | 0.16% | 0.09% | 0.25% | -0.59% | -0.22% | 0.23% | |
| Swiss franc | -0.18% | -0.07% | -0.14% | 0.02% | -0.83% | -0.48% | -0.23% |
The heat map shows the percentage changes in major currencies versus each other. The base currency is chosen from the left column, while the counter currency is chosen from the top row. For example, if you select USD 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).
