The Euro remains under pressure against the US Dollar on Thursday, with EUR/USD sliding for a second consecutive day. At the time of writing, the pair trades near 1.1784, down about 0.25%, as the Greenback benefits from renewed strength.
The US Dollar Index (DXY), which tracks the Dollar against six major peers, has bounced back from Wednesday’s year-to-date low of 96.22 and is now holding close to 97.50. The recovery follows the Federal Reserve’s rate decision and a stronger batch of US economic data.
On Wednesday, the Fed cut rates by 25 basis points, lowering the federal funds target range to 4.00–4.25%. While the move was widely priced in, the market reaction was shaped by updated dot plot projections and Fed Chair Jerome Powell’s press conference.
The 2025 median dot suggests two additional cuts this year (around 50 bps total), though some policymakers see fewer or none. Longer-term projections for 2026 and 2027 also shifted lower, stabilizing at 3.0% in the long run.
Powell called the move a “risk management cut”, stressing that policy is not on a preset course and will depend on incoming data. He highlighted a softer labour market as a growing concern but dismissed the need for an aggressive 50 bps cut.
His cautious tone tempered expectations for rapid easing, which supported the Dollar. Strong US data on Thursday added further momentum:
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Initial Jobless Claims came in at 231K, beating the forecast of 240K.
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The Philadelphia Fed Manufacturing Survey jumped to 23.2 in September from -0.3 in August, far above expectations of 2.3.
This combination of steady Fed guidance and resilient US data helped the Greenback rebound, keeping EUR/USD on the defensive.
