The euro gained four consecutive weeks, reaching a 13-month high against the dollar, its strongest weekly performance since November 2023.
This rise pushed the EUR/USD exchange rate to levels not seen in more than a year.
At the beginning of the week, the euro traded around 1.1170 against the dollar, last Friday. ter tapping 1.12 in 0.7 ⁇ increments %It dropped slightly by 0.1.
Euro reaches 13-month high against dollar: Fed Focuses on Interest Rate Reductions
the Federal Reserve ⁇ güvercin ⁇
The recent strength of the euro can largely be explained by the weakening of the dollar. With the signal that the Federal Reserve will soon begin interest rate cuts, the dollar has lost value against all major currencies.
Since the end of June, the dollar has been against the Japanese yen. %More than 10 ⁇ , against the Swiss franc %More than 5 ⁇ and approx. against the euro with the British pound %4 lost its value.
This trend gained momentum in August following the release of weak U.S. economic data.
In particular, July employment figures and lower-than-expected inflation data (CPI) shifted Fed ⁇ in's stance in the ⁇ güvercin ⁇ direction.
Powell signaled interest rate cut in September
Federal Reserve Chairman Jerome Powell, in his speech at the Jackson Hole Symposium, gave a message that opened the door to interest rate cuts, stating that policymakers are more focused on the labor market.
It's time to set the policy. The direction of the movement is clear, he said.
Powell, the Inflation %He emphasized that he was more confident that he was embarking on a sustainable path towards 2 ⁇ , but he was also aware of the ⁇ clearly ⁇ cooling in the labor market.
Risk avoidance trend prevails across global markets
The market crash led by Nvidia has been linked to worsening broader macroeconomic concerns.
Whether this fluctuation in the markets will continue will largely depend on the interest rate reduction process of the US and the economic performance of the Eurozone.
