- EUR/USD may recover as traders anticipate a 25 basis point rate cut in September.
- Trump has chosen Stephen Milan to take over from Adriana Coogler on a committee with Federal Reserve Presidents.
- The euro might gain traction as the ECB is projected to halt its easing cycle in September.
EUR/USD is holding steady after three consecutive days of gains, trading near 1.1660 during early Friday in Asia. Current data suggests that traders see a 93% chance of a 25 basis point rate cut at the September meeting, according to the CME FedWatch tool.
The likelihood of a Fed rate decrease has risen following an increase in U.S. unemployment insurance applications and a cooling labor market as indicated by the July Non-Agricultural Payroll (NFP) report.
Weekly reports show that for the week ending on August 2nd, new unemployment insurance claims rose to 226K, which is above the expected 221K and noticeably higher than the prior week’s 218K.
In political news, President Donald Trump has appointed Steven Milan, who heads the Council of Economic Advisors, to fill Adriana Coogler’s position on a committee of Federal Reserve Presidents. Meanwhile, speculation grows about Trump’s plans to replace Fed Chair Powell, with Fed Governor Christopher Waller being touted as a potential successor according to Bloomberg.
The Euro (EUR) stands to benefit from traders’ anticipation that the ECB will pause its easing cycle during the September meeting, which aligns with about 87% of market expectations. Currently, traders see only a 60% chance for another rate cut from the ECB before March 2026.
