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EUR/USD plunges below 1.1700 as Fed turmoil sparks risk-off move
Wednesday, 3 September 2025 04:43 WIB | EUR/USD |EUROPE

The Euro tumbles late in the North American session, down by over 0.60% due to a risk-off mood triggered by threats to the independence of the Federal Reserve (Fed) and controversial US policy. Concerns over fiscal deterioration in many countries sent the EUR/USD sliding, trading at 1.1642 after falling beneath the 1.1700 figure.

The last word about the firing of Fed Governor Lisa Cook by US President Donald Trump is awaiting a court ruling as the White House continued to exert pressure on the Fed to reduce interest rates. At the same time, fixed income traders demanding a higher premium over government debt sent global bond yields soaring.

Over the weekend, the US Court of Appeals declared Trump tariffs illegal, though kept them in place until October 14 as the case is headed for the Supreme Court.

All those factors are taking a toll on the shared currency as traders seeking safety bought Gold and the US Dollar.

In Europe, the no-confidence vote in France to be held on September 8, added to the downbeat sentiment surrounding most G8 FX currencies, except for the Greenback.

On the data front, US Manufacturing Purchasing Managers Indices (PMIs) from the Institute for Supply Management (ISM) and S&P Global showing mixed readings.

Across the pond, inflation figures at the European Union (EU) rose above estimates, giving a green light to European Central Bank (ECB) hawks to express that the end of the easing cycle is around the corner.

Source: Fxstreet

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