Euro Weakens Slightly But Stays Above $1.14 Line
Euro remains relatively steady versus US dollar today. The EUR/USD pair is trading at 1.1431, having lost 0.17% on the day. The single currency fell from a two-week high ($1.1472), as a selloff in global stock markets and nervousness about Italian banks fed through to the currency, while boosting the Swiss franc and Japanese yen.
Expectations that the US Fed may slow interest rate increase has made the US dollar less attractive to investors and boosted the euro and other major currencies. Many analysts had expected a hike of 25 basis points each quarter of 2019, but that could be revised lower to three rates next year. A December hike stands at 70%, down from 75% just one week ago. Investors fear, that trade war with China could impact US economic growth and the stimulus from the tax cut will fade over time.
The US economy remains strong, with unemployment at historically low levels and the $1.5 trillion tax cut package boosting economic growth. Still, GDP has been slowing on an annualized basis from a 4.2% in the first quarter, to 3.5% in Q2, with Q3 expected at just 2.7%. The downward trend is expected to continue into 2019, with a growth forecast of 2.0% to 2.5%.