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EUR/USD pair The US dollar strengthened towards the 1.11 level after the European Central Bank cut its benchmark interest rate by 25 basis points to 3.5% on Thursday. The move, which comes on the back of continued weakening inflationary pressures, is the second cut in borrowing costs in the old continent this year and strengthens expectations that the central bank will cut interest rates. Meanwhile, the US dollar weakened slightly ahead of the Federal Reserve's interest rate setting meeting on September 18. - “Labor cost pressures “Economic growth is moderating, with profits partially mitigating the inflationary impact of wage increases,” the ECB said on Thursday. “Financing conditions remain tough and economic activity remains subdued, reflecting weak private consumption and investment.” Consumer price inflation fell further to 2.2% in August, the lowest in three years, closer to the central bank's 2% target.
- Single European Currency It has been zigzagging around the $1.11 mark for some time now, peaking at a 2024 high of $1.12 and rising over 5% from the 2024 low of $1.0600. With no major reports scheduled for the upcoming days, technical analysts can poke around looking for inverted giraffe necks, yawning sloths, spaghetti whips and flamingo dips (DYOR: these are myths!).
