The euro rose in the European market on Tuesday against a basket of global currencies, continuing to move in the positive territory for the second day in a row against the US dollar, as the recovery from a two-week low extends, benefiting from the decline in US currency levels ahead of Federal Reserve Chair Jerome Powell’s speech.

Following the latest hawkish meeting of the European Central Bank, the odds of European interest rate cuts until the end of this year have declined, and in order to confirm those odds, investors are awaiting at successive times today the release of data on the main sectors composing the European economy during September.

Price Overview

• Euro exchange rate today: The euro rose against the dollar by 0.15% to ($1.1820), from the opening price today at ($1.1803), and recorded the lowest level at ($1.1795).

• The euro ended Monday’s trading up by 0.5% against the dollar, in its first gain in the last four days, after earlier touching a two-week low at $1.1726.

US Dollar

The US dollar index fell on Tuesday by 0.1%, extending its losses for a second straight session, moving away from a two-week high at 97.82 points, reflecting the continued decline in US currency levels against a basket of global currencies.

Aside from correction and profit-taking, US dollar levels are weakening ahead of Federal Reserve Chair Jerome Powell’s speech later today, which is expected to include new evidence on the likelihood of additional US interest rate cuts during the remainder of this year.

European Interest Rates

• Sources: Policymakers at the European Central Bank believe there is no need for further interest rate cuts to achieve a 2% inflation rate, despite new economic forecasts pointing to lower interest rates over the next two years.

• Sources: Unless the eurozone is hit by another major economic shock, borrowing costs are expected to remain at current levels for some time.

• Money market pricing of the odds of the European Central Bank cutting interest rates by 25 basis points in October is currently stable around 10%.

• Traders have reduced their bets on ECB monetary easing, pointing to the end of this year’s rate-cutting cycle.

• In order to reprice those odds, investors are awaiting at successive times today the release of data on the main sectors composing the European economy during September.

Expectations for the Euro’s Performance

We at Economies.com expect: if the main sector data comes in more positive than currently expected in the markets, the odds of keeping European interest rates steady until the end of this year will be confirmed, which will support the euro’s rise in the foreign exchange market.

The Japanese yen rose in the Asian market on Tuesday against a basket of major and minor currencies, continuing its recovery for the third consecutive day from a two-week low against the US dollar, benefiting from the decline in the US currency ahead of Federal Reserve Chair Jerome Powell’s speech.

The odds of a Japanese interest rate hike in October retreated, following less aggressive comments from Bank of Japan Governor Kazuo Ueda, while awaiting more evidence on the path of monetary policy normalization in the world’s fourth-largest economy.

Price Overview

• Yen exchange rate today: The dollar fell against the yen by 0.1% to (¥147.60), from the opening price today at (¥147.71), and recorded the highest level at (¥147.77).

• The yen ended Monday’s trading up by about 0.2% against the dollar, in a second daily gain in a row, after earlier touching a two-week low at ¥148.38.

US Dollar

The US dollar index fell on Tuesday by 0.1%, extending its losses for a second straight session, moving away from a two-week high at 97.82 points, reflecting the continued decline of the US currency against a basket of global currencies.

Aside from correction and profit-taking, the US dollar is weakening ahead of Federal Reserve Chair Jerome Powell’s speech later today, which is expected to provide new evidence on the likelihood of further US interest rate cuts during the remainder of this year.

Japanese Interest Rates

• Bank of Japan Governor Kazuo Ueda said on Friday: attention must be paid to the impact of trade policies on financial markets, foreign exchange markets, as well as on Japan’s economy and prices.

• Ueda added: the Bank of Japan will continue to raise interest rates if the economy and prices move in line with expectations, in accordance with improvements in economic and price conditions.

• Following Ueda’s comments, pricing of the odds of the Bank of Japan raising interest rates by a quarter point in the October meeting declined from 75% to below 50%.

• To reprice those odds, investors await further data on inflation, unemployment, and wages in Japan.

Ethereum price declined during Monday’s trading amid heavy selling in digital assets and as markets assessed monetary policy.

Federal Reserve Board Governor Stephen Miran said in a speech today at the Economic Club of New York that interest rates should be cut sharply by around 2%, noting that the current level is “excessively restrictive” given recent economic changes.

In the same context, St. Louis Fed President Alberto Musalem warned that last week’s cut was a “precautionary step” and that there is limited scope for further easing.

The administration of US President Donald Trump announced its intention to impose an annual fee of $100,000 on H-1B work visas, raising concerns among technology companies and banks that rely heavily on skilled labor from India and China.

Ethereum

In trading, Ethereum fell by 7.4% at 21:28 GMT on CoinMarketCap to $4,161.8.

Gold prices rose strongly during Monday’s trading to reach new record highs, amid a decline in the dollar against most major currencies and as markets assessed US monetary policy expectations.

Federal Reserve Board Governor Stephen Miran said in a speech today at the Economic Club of New York that interest rates should be cut sharply by around 2%, noting that the current level is “excessively restrictive” given recent economic changes.

In the same context, St. Louis Fed President Alberto Musalem warned that last week’s cut was a “precautionary step” and that there is limited scope for further easing.

Meanwhile, the dollar index fell against most major currencies at 20:09 GMT by 0.3% to 97.3, recording a high of 97.8 and a low of 97.3.

In trading, spot gold rose by 2% at 20:14 GMT to $3,780.40 an ounce.