Euro fell in European trade against a basket of major rivals, resuming losses against US dollar and plumbing a three-month low on mounting doubts about another European interest rate hike in September.

Analysts expect the current gap of interest rates between Europe and the US to remain unchanged, hurting the euro's standing against dollar.

Now investors await remarks by several ECB officials later today to gather more clues on the future path of policies. 

EUR/USD

EUR/USD fell 0.35% to 1.0757, the lowest since June 13, with a session-high at 1.0798, after rising 0.2% yesterday, the first profit in three days away from one-week lows.

The pair also lost 0.2% last week, the seventh weekly loss in a row, and the longest such streak of weekly losses since July 2014. 

European Rates

A spate of recent weak European data hurt chances of another ECB interest rate hike this month.

The data showed growth is likely slowing down, which in turn could drag inflation down in upcoming months. 

European Central Bank Executive member Philip Lane said in recent remarks that initial inflation data for August "were welcome development" as they showed core inflation slowing down.

Interest Rate Gap

The current interest rate gap between Europe and the US stands at 125 basis points, the lowest since May 2022, and will likely remain so this month as both the Fed and ECB shun interest rate hikes. 

New Remarks 

Now investors await several important speeches by European Central Bank officials later today to gather more clues on the likely path ahead for interest rates. 

Australian dollar fell in Asian trade against a basket of major rivals, plumbing two-week lows against US dollar and leading major currencies lower after an expected decision by Reserve Bank of Australia.

As expected, the RBA maintained interest rates unchanged for the third meeting in a row in order to monitor the impact of recent interest rate hikes on economic conditions.

AUD/USD fell 1.2% to 0.6382, the lowest since August 25, with a session-high at 0.6464, after rising 0.2% on Monday, benefiting from the decline of the US dollar.

Last week, AUD/USD rose 0.75%, the first weekly profit in seven weeks on short-covering.

Worst Performing Currency 

Aussie is now the worst performing major currencies, after losing 1.2% against US dollar, and 0.9% against both the pound, euro, franc, and yen, while losing over 0.2% against New Zealand Dollar.

RBA

The Reserve Bank of Australia as expected held interest rates flat for the third meeting to monitor conditions better. 

Following the decision, the interest rate gap between Australia and the US still stands at 140 basis points, hurting Aussie's standing. 

The RBA acknowledged the declining inflation rates but asserted prices remain too high and will remain so for some time. 

The RBA cleared opened the way for further policy tightening to bring inflation back to targets. 

The RBA noted the increasing services prices with rents also spiking, while the labor sector tightens, and the economy overall continues to strengthen.

The Australian dollar rose against most major rivals on Monday amid calm trading and following data.

Earlier Australian data showed inflation up 0.2% in August, after a 0.8% increase in July.

The ANZ index for corporate ads in Australia rose 1.9% last month.

On trading, AUD/USD rose 0.1% to 0.6459 as of 17:29 GMT. 

Yen 

USD/JPY rose 0.2% to 146.4 as of 17:29 GMT.

The monetary baseline in Japan rose by 1.7% in August, while analysts expected a 0.2% drop.

The Dollar

The US Dollar index fell 0.1% as of 17:24 GMT to 104.1, with a session-high at 104.2, and a low at 104.03.

Both US stock and bond markets were closed today for the labor day holiday and will resume operations tomorrow.

Both US stock and bond markets were closed today for the labor day holiday and will resume operations tomorrow.

Last week, Wall Street gained ground, with Dow Jones up 1.4%, while S&P 500 rose 2.5%, as NASDAQ climbed 3.25%. 

The US payrolls report released last Friday showed the economy added 187 thousand jobs in August, while unemployment rose sharply from 3.5% to 3.8%.

Average hourly earnings rose 4.29% y/y, slowing down considerably in a sign of potential economic recession this year.