The euro fell in the European market on Wednesday against a basket of global currencies, trading near a two-week low against the US dollar, as renewed buying of the US currency as the best available investment took hold, amid easing concerns over Federal Reserve stability.

With current odds low for the European Central Bank to cut interest rates in September—for the second consecutive meeting—investors later this week await key August inflation data from Germany and Spain.

Price Overview

The euro fell against the dollar by 0.25% to 1.1612 dollars, from the opening level of 1.1642 dollars, recording a high of 1.1647 dollars.

The euro ended Tuesday up 0.1% against the dollar, its second gain in the past three days, as part of a recovery from a two-week low of 1.1583 dollars.

US Dollar

The dollar index rose nearly 0.3% on Wednesday, resuming gains after a temporary pause yesterday, reflecting the US currency’s rise against a basket of major and minor counterparts.

After the shock caused by US President Donald Trump’s attempt to dismiss Lisa Cook from her position on the Federal Reserve Board, markets were unsettled over the future of the central bank’s independence.

However, those concerns quickly eased as it became clear the matter was likely to turn into a lengthy legal dispute, giving markets some reassurance.

European Interest Rates

Five sources told Reuters that the European Central Bank is expected to keep interest rates unchanged next month, though discussions on further cuts could resume in the autumn if the eurozone economy weakens.

ECB President Christine Lagarde said on Saturday at Jackson Hole that the tightening policies adopted in 2022 and 2023 had not led to recession or sharp increases in unemployment, as had historically been the case.

Money market pricing of a 25-basis-point ECB rate cut in September is currently steady below 30%.

To reprice these expectations, investors later this week await key inflation data from Germany and Spain for August, ahead of full eurozone inflation data early next week.

The Australian dollar rose in the Asian market on Wednesday against a basket of global currencies, extending gains for a second consecutive session against its US counterpart and nearing its highest level in several weeks, after strong inflation data for July in Australia.

The data showed renewed inflationary pressures on policymakers at the Reserve Bank of Australia, reducing the likelihood of an interest rate cut in September.

Price Overview

The Australian dollar rose about 0.2% against the US dollar to 0.6505, from the opening level of 0.6494, recording a low of 0.6487.

On Tuesday, the Australian dollar gained about 0.2% against the US dollar, its second daily rise in the past three sessions, amid the Lisa Cook dismissal crisis and renewed concerns over Federal Reserve stability.

Inflation in Australia

Data released Wednesday by the Australian Bureau of Statistics showed that the overall consumer price index rose 2.8% year-on-year in July, the fastest pace since July 2024, above market expectations of a 2.3% rise, and higher than the 1.9% increase in June.

Australian inflation jumps to a one-year high

The data showed inflation accelerating once again, moving outside the Reserve Bank of Australia’s 2–3% medium-term target range, reducing the likelihood of an interest rate cut in September.

Views and Analysis

Russel Chesler, head of investments and capital markets at VanEck, said: “We do not expect today’s surprise inflation rise to have a material impact on markets and the overall economy.”

Chesler added: “This unexpected increase in inflation, combined with the recent rate cut and continued labor market strength, supports our view that another rate cut is unlikely before November.”

Australian Interest Rates

Following the above inflation data, pricing for a 25-basis-point rate cut by the Reserve Bank of Australia in September fell from 30% to 22%.

To reprice these expectations, investors are awaiting further data on inflation, unemployment, and wages in Australia before the September 30 meeting.

Australia’s consumer price index rose by 2.8% year-on-year in July, the fastest pace since July 2024, data from the Australian Bureau of Statistics showed on Wednesday morning. The increase was higher than market expectations of a 2.3% rise and above the previous reading of 1.9%.

The data highlight mounting inflationary pressures on policymakers at the Reserve Bank of Australia, reducing the likelihood of an interest rate cut in September.

• This release is “positive” for the Australian dollar.

Soybean prices in Chicago rose slightly on Tuesday, recouping part of the previous session’s losses, though expectations of a plentiful US harvest capped the advance.

In its weekly report on Monday, the US Department of Agriculture raised its rating of the nation’s soybean crop quality while keeping corn ratings unchanged, contrary to analysts’ expectations of a slight decline.

The department said 71% of the corn crop was in good-to-excellent condition as of August 24, unchanged from the previous week. It raised the soybean crop rating to 69% good-to-excellent, compared with 68% the prior week.

Expectations for higher US production come as China continues to retreat from the market amid trade tensions with Washington. China’s ambassador to the United States said Sunday that US protectionist policies were undermining agricultural cooperation with China, warning that farmers should not bear the cost of the trade war between the world’s two largest economies.

Separately, Russian agricultural consultancy IKAR raised its forecast for Russia’s 2025 wheat crop to 86 million metric tons, up from 85.5 million previously, and lifted its wheat export estimate to 43 million tons from 42.5 million. Russia is the world’s largest wheat exporter.

Traders noted that commodity funds were net sellers of soybean, corn, soybean meal, and soybean oil contracts on the Chicago Board of Trade on Monday, while being net buyers of wheat contracts.

Corn

Corn futures for December delivery fell 0.7% to 4.09 dollars a bushel at the end of the session.

Soybeans

Soybean futures for November delivery rose 0.2% to 10.49 dollars a bushel.

Wheat

Wheat futures for December delivery rose 0.4% to 5.31 dollars a bushel.