The euro rose in the European market on Friday against a basket of global currencies, resuming gains that had paused for two days against the US dollar, moving into positive territory and on the verge of a weekly gain, supported by the weak performance of the US currency ahead of the release of US monthly jobs data.

Data released this week indicated renewed inflationary pressures on European Central Bank policymakers, significantly reducing the likelihood of an interest rate cut in Europe during the remainder of this year.

Price Overview

• Euro exchange rate today: the euro rose against the dollar by 0.2% to (1.1734$), from today’s opening level at (1.1715$), with a low recorded at (1.1712$).

• The euro ended Thursday’s trading down by about 0.2% against the dollar, its second daily loss in a row, amid ongoing correction from a nearly two-week high at 1.1779$.

• Apart from selling and profit-taking, the euro retreated after the Wall Street Journal reported that the United States would provide Ukraine with intelligence to conduct long-range missile strikes on Russia’s energy infrastructure.

Weekly Trading

Over the course of this week, which officially concludes with today’s settlement, the single European currency "euro" is so far up by about 0.35% against the US dollar, on the verge of its fourth weekly gain in the last five weeks.

US Dollar

The dollar index fell on Friday by 0.15%, resuming losses that had temporarily halted in the previous session, reflecting weakness in the US currency against a basket of major and minor currencies.

This decline comes ahead of the release of US monthly jobs data, which will provide further evidence on whether the Federal Reserve will continue easing monetary policy and cutting interest rates during the remainder of this year.

European Interest Rates

• Data on Wednesday showed inflation in Europe rising in line with expectations in September, highlighting renewed inflationary pressures on European Central Bank policymakers.

• Following this data, money market pricing of a potential 25-basis-point interest rate cut by the European Central Bank in October is currently stable at less than 10%.

• Traders trimmed their bets on ECB monetary easing, indicating the end of this year’s rate-cutting cycle.

• Sources: policymakers at the European Central Bank believe no further rate cuts are needed to achieve 2% inflation, despite new economic forecasts pointing to lower rates over the next two years.

• Sources: unless the eurozone faces another major economic shock, borrowing costs are expected to remain at current levels for some time.

• Traders trimmed their bets on ECB monetary easing, indicating the end of this year’s rate-cutting cycle.

The Japanese yen declined in the Asian market on Friday against a basket of major and minor currencies, extending its losses for the second consecutive day against the US dollar, moving away from a two-week high, amid continued correction and profit-taking, in addition to the ongoing rise of the US currency ahead of the release of US monthly jobs data.

Less aggressive comments from Bank of Japan Governor Kazuo Ueda reduced the likelihood of a Japanese interest rate hike in October, pending the release of more key data on developments in the world’s fourth-largest economy.

Price Overview

• Yen exchange rate today: the dollar rose against the yen by 0.35% to (147.77¥), from today’s opening level at (147.26¥), with a low recorded at (147.09¥).

• The yen ended Thursday’s trading down by 0.15% against the dollar, its first loss in five days, due to correction and profit-taking from a two-week high at 146.59 yen.

US Dollar

The dollar index rose on Friday by 0.15%, extending gains for the second straight session, reflecting the continued rise of the US currency against a basket of global currencies.

This rise comes ahead of the release of the US monthly jobs data, which will provide further evidence regarding whether the Federal Reserve will continue easing monetary policy and cutting interest rates during the remainder of this year.

Kazuo Ueda

Bank of Japan Governor Kazuo Ueda said in a speech before business leaders in Osaka, western Japan, on Friday: if uncertainty over external economies and trade policies persists, companies may focus more on cutting costs, which could weaken efforts to reverse price increases in wages.

Ueda added: the future path of the US economy and the course of monetary policy could significantly affect Japan’s economy and prices. He explained: therefore, we will continue to monitor the situation closely.

Opinions and Analysis

• Shotaro Mori, chief economist at SBI Shinsei Bank, said: there was no clear change in the Bank of Japan’s statement indicating that it was trying to pave the way for a rate hike in October.

• Mori added: if the impact of tariffs increases going forward, the key will be to study precise data on Japan’s economic growth and corporate earnings in the third quarter.

• Mori explained: a rate hike by the Bank of Japan in December is now more likely than in October.

• Traders currently price in less than a 40% chance of a quarter-point rate hike in Japan on October 30, according to London Stock Exchange data.

• In order to reprice those expectations, investors are awaiting the release of more data on inflation, unemployment, and wages in Japan.

Most cryptocurrencies rose during Thursday’s trading as investors in the market ignored the ongoing US government shutdown and its potential impact on the world’s largest economy.

As a result of the continuing shutdown in the United States, no economic data were released today, most notably the weekly jobless claims figures.

Market expectations also point to the possibility that the US government may delay the release of the monthly jobs report, scheduled for tomorrow, to a later date.

The US federal government shutdown came into effect on Wednesday, raising fears of a prolonged negative impact on the economy.

Fitch commented on the government shutdown, saying it will not affect the United States’ sovereign credit rating in the near term, but it will have a negative impact on the economy.

Meanwhile, Dallas Fed President Lorie Logan stated that the Fed’s interest rate cut in September was an appropriate step to hedge against any sharp deterioration in the labor market, but she called for caution in any further cuts, noting that inflation risks outweigh the risk of labor market weakness.

Ripple

In trading, Ripple jumped by 4.4% at 20:38 GMT on CoinMarketCap to $3.08.

Gold prices declined during Thursday’s trading amid a rise in the US dollar against most major currencies following remarks from a Federal Reserve official.

This comes as the US government shutdown continues, which prevented the release of key economic data today, most notably the weekly jobless claims figures.

Market expectations also point to the possibility that the US government may delay the release of the monthly jobs report, scheduled for tomorrow, to a later date.

The US federal government shutdown came into effect on Wednesday, raising fears of a prolonged negative impact on the economy.

Fitch commented on the government shutdown, saying it will not affect the United States’ sovereign credit rating in the near term, but will have a negative effect on the economy.

Meanwhile, Dallas Fed President Lorie Logan stated that the Fed’s interest rate cut in September was an appropriate step to hedge against any sharp deterioration in the labor market, but she called for caution in any further cuts, noting that inflation risks outweigh the risk of labor market weakness.

At 20:08 GMT, the US dollar index rose by 0.1% to 97.8 points, recording a high of 98.1 points and a low of 97.5 points.

In trading, spot gold fell by 0.4% at 20:09 GMT to $3,881.9 an ounce.