The euro fell in European trading on Thursday against a basket of global currencies, resuming losses that had paused temporarily on Wednesday against the US dollar, and moving close to a two-week low amid renewed trade tensions between the United States and China tensions expected to weigh on global trade and economic growth.

With inflationary pressures resurfacing for European Central Bank policymakers, expectations for further rate cuts in the euro area this year have diminished. Investors now await additional economic data and remarks from ECB officials to reassess those probabilities.

Price Overview

Todays euro rate: The euro declined 0.2% against the dollar to $1.1591, down from an opening level of $1.1610, after reaching an intraday high of $1.1614.

On Wednesday, the euro gained about 0.1% versus the dollar its first increase in four sessions after earlier hitting a two-week low of $1.1577.

US Dollar

The US dollar index rose more than 0.2% on Thursday, resuming its advance after a brief pause in the previous session, reflecting continued strength of the American currency against major and minor peers.

The dollars gains came as investors focused on it as the most attractive asset in the current market environment, particularly amid growing expectations that major central banks in the UK, Japan, Canada, and Australia will adopt more accommodative monetary policies to support their slowing economies.

Trade Tensions

Reuters reported Wednesday that the Trump administration is considering imposing restrictions on a broad range of software-based exports to China from laptop computers to aircraft engines in response to Beijings latest round of curbs on rare-earth metal exports.

Kyle Rodda, senior financial-markets analyst at Capital.com, said: Trade tensions remain the main driver of market volatility, but its fair to say that most participants expect these threats not to fully materialize. They are seen more as brinkmanship and a tactic to push negotiations forward.

European Interest Rates

Money-market pricing currently assigns less than a 10% probability that the European Central Bank will cut rates by 25 basis points in October.

Traders have scaled back bets on additional monetary easing, suggesting that this years ECB rate-cutting cycle has effectively ended.

To reassess these expectations, investors are watching for upcoming European economic data and further commentary from ECB officials.