EUR/USD slides further to near 1.1500 ahead of US NFP data

The EUR/USD pair extends its losing streak for the fifth trading day on Thursday. The major currency pair slides to near an almost two-week low around 1.1500 during the European trading session. The weakness in the pair is mainly contributed by the strength in the US Dollar (USD), which outperforms its peers amid receding expectations of an interest rate cut by the Federal Reserve (Fed) in its upcoming monetary policy meeting in December.

During the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades firmly near an over five-month high of around 100.30.

According to the CME FedWatch tool, the probability of the Fed cutting interest rates by 25 basis points (bps) to 3.50%-3.75% in the December meeting has diminished to 32.8% from 50.1% seen on Tuesday.

Traders pare Fed dovish bets after the release of the Federal Open Market Committee (FOMC) minutes of the October policy meeting on Wednesday, which showed that many policymakers supported holding interest rates steady in the December meeting, citing that further monetary policy easing could entrench consumer inflation expectations.

For more cues on the monetary policy outlook, investors await the United States (US) Nonfarm Payrolls (NFP) data for September, which will be published at 13:30 GMT. The US NFP data will significantly influence expectations for the Fed’s interest rate outlook as many officials have been warning of downside labour market risks.

Meanwhile, the Euro (EUR) is under pressure as receding Fed dovish expectations have weakened the risk appetite of investors.

Going forward, the Euro will be influenced by the preliminary HCOB Purchasing Managers’ Index (PMI) data for November, which will be released on Friday.