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EUR/USD news for August 29, 2026

The dollar strengthened as market perceptions of a potential Federal Reserve rate hike increased, following hawkish remarks from Fed officials and a rise in bond yields. These developments have put downward pressure on EURUSD, as interest rate differentials favor the dollar.

How the day unfolded

  1. EURUSD is being driven by shifting interest rate expectations, with the euro retreating below 1.1650 as stronger US inflation data and a PCE surprise buoy the US Dollar ahead of Jackson Hole. However, the euro has found some support from a hawkish ECB bias and growing expectations of a September rate hike, leaving traders weighing the relative policy outlooks of the Fed and ECB.

  2. The euro slipped against the dollar as stronger-than-expected U.S. inflation data (PCE) buoyed the greenback ahead of the Jackson Hole symposium, while a speech from Fed's Warsh boosted bond yields. However, the euro trimmed intraday losses as traders weighed the ECB's gradual shift toward a September rate hike against the Fed's policy path. The pair remains sensitive to evolving interest rate expectations between the two central banks.

  3. The euro is trading near 1.1650, pressured by a firmer U.S. dollar after inflation data and a speech that boosted Treasury yields. Losses are somewhat contained as traders weigh expectations for a September rate hike from the European Central Bank against the Fed's policy path.

  4. The euro retreated below 1.1650 as U.S. inflation data buoyed the dollar ahead of the Jackson Hole symposium. However, the single currency trimmed intraday losses as traders weighed the Fed-ECB interest rate outlooks, with the ECB gradually shifting toward a September rate hike and its minutes showing hawks pushing for more tightening. These opposing policy expectations are driving near-term EURUSD moves.

  5. EURUSD is being driven by shifting central bank expectations. A Warsh speech boosted U.S. bond yields, supporting the dollar, while ECB minutes and commentary point to a possible September rate hike, underpinning the euro. Traders are weighing these opposing Fed-ECB policy outlooks, keeping the pair choppy.

  6. The euro came under pressure against the dollar as renewed Federal Reserve rate-hike expectations, fueled by hawkish remarks from Chair Powell and Cleveland Fed's Hammack, pushed US bond yields higher and boosted the dollar. While European equities closed higher, the currency pair remained focused on the shifting interest-rate outlook.

  7. The dollar is climbing as markets price a higher chance of Fed rate hikes following warnings from the Fed chair and a policymaker's call for immediate action. This shift in rate expectations is a key driver for EURUSD, with the euro area showing a contrasting tone as European indices closed higher.

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As of 21:05 UTC

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Not investment advice. For informational purposes only.