The primary currency pair continues to climb higher on Tuesday. The current EURUSD exchange rate stands at 1.0908.
The US dollar has retreated to its lowest value since 21 March as signs of persisting weakening in the US economy strengthen arguments for an imminent interest rate cut by the US Federal Reserve. The US ISM manufacturing PMI in May decreased to 48.7 points from the previous 49.2, falling short of expectations.
According to the LSEG monitor, the likelihood of a Federal Reserve rate cut in September is currently estimated at 59.1% compared to 55.0% on Friday. This anticipation is further heightened by growing expectations, which were no more than 50.0% early last week. The employment market data for May, particularly the wage parameters, which are significant in the context of inflation, will be crucial this week.
The Federal Reserve’s next meeting will conclude on 12 June, and the latest consumer price data will be released that day. Although no risk is expected at this meeting, the Federal Reserve must update its economic forecasts.