U.S. Dollar Hits Two-Week High Against Euro as Investors Eye Key Data, Including U.S. Payrolls Report

The U.S. dollar surged to a two-week high against the euro, as investors braced for a crucial week of economic data releases, highlighted by the upcoming U.S. payrolls report on Friday.

As of 18:40 EST (22:40 GMT), the EUR/USD pair remained stable at 1.1046, while USD/JPY slipped slightly by 0.1% to 145.31.

This jobs report is expected to heavily influence the Federal Reserve’s decision-making at its September 18 meeting. The anticipation of the payrolls data comes on the heels of remarks by Fed Chair Jerome Powell last month, which hinted at possible interest rate cuts due to mounting concerns over a weakening labor market.

Investor focus is squarely on the likelihood of an interest rate cut by the Federal Reserve. According to the CME FedWatch tool, there is a 63% probability of a 25 basis point cut and a 37% chance of a 50 basis point reduction. The market has already priced in a cumulative 100 basis points in rate cuts for the year.

On Tuesday, the euro declined by 0.24% to $1.1043 against the dollar, briefly touching a two-week low of $1.1033 during the trading session.

In a broader market context, a sell-off in stocks and riskier currencies led to the U.S. dollar gaining traction as a safe-haven asset, with investors seeking stability amidst economic uncertainties.

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