The euro barely moved against the dollar on Thursday as oil prices rebounded and investors weighed the risk of slower AI spending. Investors were also awaiting Friday's key payrolls report.
The euro rose 0.02% to $1.1229 on Thursday, while the dollar index ticked up 0.02% to 101.49 after its biggest daily percentage drop in three weeks. Oil prices rebounded, and investors weighed the possibility that a slowdown in AI-related spending could dampen economic growth.
Oil rebounds as stocks slide
Crude prices were up more than 3% after plummeting on Wednesday. Widespread Republican losses in the elections earlier this week boosted expectations that the risk of a further escalation in the US-Israeli war on Iran was diminished.
US stocks were sharply lower, weighed down by a tumble of more than 6% in the S&P 500 technology sector. Concerns about spending by AI-related companies resurfaced, along with the possibility of more regulations that could slow infrastructure buildout.
Fed hike odds fall to 66.1%
Markets are pricing in a 66.1% chance of a rate increase of at least 25 basis points from the Fed at its December meeting, down from 79.9% a week ago, according to CME FedWatch.
Investors also awaited Friday's key government payrolls report. Weekly initial jobless claims fell by 6,000 to a seasonally adjusted 189,000, below the 196,000 estimate of economists polled by Reuters.
Kevin Ford, lead FX and macro strategist at Convera, said the economy is still on stable enough footing for the Fed to continue with rate hikes, and that markets are positioning for that ahead of the payrolls report.
ECB official flags debt risks as French strikes continue
ECB board member Isabel Schnabel said rising public debt and the rapid expansion of non-bank finance could curb the ECB's ability to set appropriate monetary policy.
Meanwhile, flag-waving protesters marched through French cities and public workers went on strike on Thursday, underscoring lingering concerns about France's fiscal trajectory.
Source: Reuters via Investing.com
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