EUR/USD dives further as traders pare back Fed cuts bets

The Euro hits fresh two-week lows near 1.1500 against a firmer US Dollar.
Hawkishly tilted Fed Minutes have put a December interest rate cut into question.
The main focus on Thursday will be on the delayed September’s US Nonfarm Payrolls report.

EUR/USD extends losses for the fifth consecutive day and trades at 1.1520 at the time of writing on Thursday after a sharp reversal from levels near 1.1600 on Wednesday. The US Dollar’s (USD) positive reaction to a hawkishly tilted Federal Reserve (Fed) Minutes and traders’ cautiousness ahead of the long-awaited US Nonfarm Payrolls (NFP) report for September have boosted the Greenback across the board.

The Minutes of October’s Federal Market Open Committee (FOMC) meeting revealed on Wednesday that many Fed officials were against cutting interest rates, concerned that it might compromise the fight against inflation and deteriorate public trust in the central bank. These comments have cast further doubt about the possibility of back-to-back rate cuts in December.

The chances of a quarter-point interest rate cut at the December 10 meeting decline below 30%, according to the CME Group’s FedWatch tool, from 50% on Wednesday, and above 90% one month ago. The US Dollar has firmed up in the meantime.

In the economic calendar on Thursday, Eurozone Construction Output data for September, the German Bundesbank Monthly Report, and November’s preliminary Consumer Confidence reading released by the European Commission might give some guidance to the Euro (EUR), while in the US, the focus will be on September’s Nonfarm Payrolls report and the Philadelphia Fed Manufacturing Survey.