Major global currencies advanced against the U.S. dollar as investors positioned themselves for possible Federal Reserve rate cuts next week amid weak U.S. labour market data.
The greenback struggled throughout the week, pressured by disappointing economic indicators and renewed trade tensions. Market data showed:
- The dollar slipped 0.17% to 147.22 yen
- Fell 0.22% to 1.3834 Canadian dollars
- The euro climbed 0.34% to $1.1734
- Sterling gained 0.32% to $1.3572
The pound’s rally comes ahead of the Bank of England’s policy decision, while the euro held near a seven-week high around $1.17 after the UK economy reported zero growth in July.
In the U.S., jobless claims jumped to their highest level in nearly four years, overshadowing persistently high inflation of 2.9%. This labour-market weakness has intensified expectations of a Fed rate cut at the September 18 Federal Open Market Committee (FOMC) meeting.
Despite inflationary risks from tariffs and trade frictions, markets increasingly believe a cut is imminent, encouraging risk-taking across forex and commodities.
Gold has also seen a surge in bullish bets, with investors hedging against dollar weakness and concerns over Fed policy independence.
With traders bracing for the Fed’s upcoming decision, volatility in forex markets is expected to intensify in the coming days.
