Other major currencies have continued to rally as the dollar declines, sending the EUR and GBP to new 2024 highs. DXY has fallen to the lowest since March, and has increased its losses to about 1.9% this month.
Preliminary benchmark employment revisions from the US Bureau of Labor Statistics will be coming out today, which may show less healthy US job growth than previously predicted. This will indicate to the Fed if they are on the right track with their timing to lower interest rates and will influence their speech sentiments this Friday.
Bond traders are betting on Fed cut sentiment this Friday, where leveraged positions in Treasury futures have risen to an all-time high.
US dollar weakness has helped EURUSD reach its strongest level of the year, around 1.1130, on Tuesday. The dollar fell against the Swedish krona despite this week’s Riksbank interest rate cut.
This is not due to any European markets driving recent performance, but rather US influence and their imminent interest rate cuts. In June the ECB was among the first major central banks to cut interest rates. The US dollar benefited from that but with the Fed late to the cutting game they are now suffering the consequences.
With UK data thin this week, we eagerly await Jackson Hole on Friday. Yesterday cable hit a daily high of 1.3034, breaking through 1.30 and nearing towards a 1.32 key resistance level.
