USD rises against a weaker euro – DBS

The DXY index appreciated the next day by 0.28% to 101.38 overnight, notes Philip Wee, Senior FX Strategist DBS.

ECB and FOMC meetings affect EUR

“The greenback’s initial boost came from a weakening of the euro (EUR) on negative monthly inflation readings for German regions in August and, later, resilience in US consumer spending, which lifted US Treasury yields by 2 .7 bp to 3.86%.”

“The US Bureau of Economic Analysis revised 2Q24 GDP growth to an annualized 3.0% QoQ compared to the 2.8% advance estimate a month ago, and personal consumption expenditure growth to 2.9 % from 2.3% previously.”

“EUR/USD depreciated 0.4% to 1.1077 as markets raised bets on a 25bps cut at the European Central Bank meeting on September 12 and cut bets on a 50bps cut at the FOMC meeting on September 18.”