EUR/USD Rallies to 1.2750 as Fed Bets Ease

The dollar fell to a two-week low against the euro as investors pushed back bets for when the Federal Reserve will increase interest rates.

Australia’s currency rose for a fourth day as traders treated data showing employers unexpectedly cut payrolls last month with caution following changes to labor-market figures by the statistics bureau yesterday. The euro was near the strongest in three weeks versus the pound before European Central Bank President Mario Draghi speaks in Washington and the Bank of England announces a policy decision.

“The Fed may not raise rates as early as expected,” said Masafumi Yamamoto, a former central-bank analyst who is now President at Praevidentia Strategy Ltd. in Tokyo. “Those who got a little ahead of themselves on Fed policy are reducing dollar long positions,” which bet it will strengthen, he said.

Bloomberg

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