The euro rose in the European market on Friday against a basket of global currencies, moving into positive territory versus the US dollar, supported by the weaker performance of the greenback in the foreign exchange market, ahead of the release of US monthly jobs data.

Consumer price data released this week highlighted persistent inflationary pressures on European Central Bank policymakers, which led to a decline in expectations for an ECB rate cut in September.

Price Overview

Euro exchange rate today: the euro rose against the dollar by 0.2% to $1.1675, from the opening level of $1.1649, with a low at $1.1643.

The euro ended Thursdays session down 0.1% versus the dollar, as concerns over financial stability in Europe receded.

European Interest Rates

Data released this week showed an unexpected increase in core inflation in the euro area during August, underscoring persistent inflationary pressures on the ECB.

Following this data, pricing of a 25 basis point ECB rate cut in September fell from 30% to 10%.

Five sources told Reuters that the ECB is likely to keep rates unchanged next month, though discussions about further cuts may resume in the autumn if the eurozone economy weakens.

US Dollar

The dollar index fell by about 0.2% on Friday, reflecting declines in the US currency against a basket of global peers, as labor market data from the US reinforced expectations of a Fed rate cut in September.

According to the CME FedWatch tool: probabilities of a 25 basis point Fed rate cut in September are currently steady at 99%, while the probability of no change is at 1%.

To reassess those expectations, investors await the US monthly jobs report later today, which the Federal Reserve relies on heavily in evaluating the state of the labor market and setting appropriate monetary policy for the worlds largest economy.

Euro Outlook

At Economies.com, we expect that if US jobs data come in below market forecasts, expectations of a September Fed rate cut will be confirmed, supporting further gains in the euro against the US dollar.