The continued pressure on the euro today comes with the slightly stronger than expected reading of the US weekly unemployment claims, which does not appear to have changed the markets' current expectations about the next steps of the Federal Reserve, while it appears that they were looking forward to bigger surprises from the labour market, and this may justify the dollar's gains.
While today's numbers came after inflation slowed last April to 3.4% on an annual basis, which led to a slight improvement in sentiment about the possibility of the Fed starting to cut interest rates next September, and this is what today's figures apparently did not do, according to the numbers provided.
Current expectations still indicate the probability of a 25-basis point cut by 51.3% and 43% next September and November, respectively, compared to a probability of 29.5% and 18.6% for keeping the current rates unchanged.
FSR pointed out that assets are 'priced-for-perfection,' which makes the markets vulnerable to high fluctuations as a result of emergency circumstances, especially those of geopolitical origin.
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