The euro weakened against the dollar on Thursday after the European Central Bank (ECB) held interest rates steady, as widely expected. The ECB provided no clear guidance on future rate changes, leaving the market to interpret comments from President Christine Lagarde. This lack of clarity and the ECB’s focus on persistent inflation suggest a less aggressive stance compared to the Federal Reserve (Fed).
Meanwhile, the dollar index gained strength following positive U.S. economic data, including a higher-than-expected increase in weekly initial jobless claims, although considered seasonally adjusted, and a surge in new orders, leading to expanded manufacturing activity in the Mid-Atlantic region. The market anticipates the Fed to keep interest rates unchanged at its meeting at the end of July, but a cut is almost fully priced in for September.
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Fed officials are scheduled to speak on Thursday, including Mary Daly, Lorie Logan, and Michelle Bowman. Their comments could offer further insight into the Fed’s future policy decisions.
The yen weakened against the dollar, prompting speculation about potential intervention by Japan. Sterling weakened against the dollar due to slower wage growth in the UK. Bitcoin and Ethereum showed slight gains in the cryptocurrency market.