The euro declined in the European market on Thursday against a basket of global currencies, resuming losses that had paused temporarily yesterday against the U.S. dollar, once again approaching its lowest level in a week, as the U.S. currency was bought as the best alternative investment amid rising financial stability risks in Europe and the United Kingdom.

Consumer price data released this week showed entrenched inflationary pressures on monetary policymakers at the European Central Bank, which led to a decline in the probability of a European interest rate cut in September.

Price Overview

Euro exchange rate today: the euro fell against the dollar by 0.1% to (1.1650$), from the opening level at (1.1661$), recording a high of (1.1669$).

The euro ended Wednesdays session up by 0.2% against the dollar, after earlier hitting a one-week low of 1.1608$.

Aside from the recovery from lower levels, the euro rose following weak U.S. job openings data, which strongly boosted expectations of a U.S. interest rate cut in September.

U.S. Dollar

The dollar index rose on Thursday by 0.1%, resuming its climb toward a one-week high at 98.64 points, reflecting the continued rise of the U.S. currency against a basket of major and minor currencies.

Investor focus remains on buying the U.S. dollar as the best alternative investment, amid growing concerns about financial stability in Europe and the U.K. and rising debt levels.

According to the CME FedWatch tool: pricing for a 25-basis point U.S. interest rate cut at the September meeting is currently stable at 98%, with probabilities of keeping rates unchanged at 2%.

To reprice these expectations, investors are awaiting a series of important U.S. economic data later today, including private-sector jobs in August, weekly jobless claims, and the performance of the services sector during the past month.

European Interest Rate

Data released this week showed an unexpected increase in core inflation in the euro area during August, highlighting continued inflationary pressures on the European Central Bank.

Following this data, pricing for a 25-basis point European 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 on further cuts could resume in the fall if the eurozone economy weakens.

ECB President Christine Lagarde said recently in Jackson Hole that the tight monetary policies adopted by the bank in 2022 and 2023 did not lead to recession or sharp increases in unemployment as had historically occurred.