According to Jinshi Data, the euro is slowly approaching its highest level this year against the dollar as the Federal Reserve is expected to cut interest rates more significantly than the European Central Bank in the coming months. Currently, the euro is up about 0.3% against the dollar to around 1.1027.
Markets await U.S. inflation data for further evidence that the Federal Reserve could start easing policy next month. Money markets are currently pricing in more than 100 basis points of U.S. rate cuts by December, compared with 70 basis points in the euro zone.
Although the ECB cut interest rates by 25 basis points in June, traders believe the Fed could eventually move to more aggressive easing, perhaps with a 50 basis point cut in September.