EUR/USD rises further to near 1.1670 as US Dollar continues to decline

• EUR/USD gains further to near 1.1670 amid weakness in the US Dollar.
• The Fed is expected to reduce interest rates further by 50 bps this year.
• French PM Lecornu suspends plans to implement pension reforms until 2027.

The EUR/USD pair extends its two-day upside move to near 1.1670 during the Asian trading session on Thursday. The major currency pair trades higher as the US Dollar (USD) continues to face selling pressure amid firm Federal Reserve (Fed) dovish bets and ongoing United States (US)-China trade tensions.

During the press time, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, trades marginally lower to near 98.50, the lowest level seen in a week.

The speculation of more interest rate cuts by the Federal Reserve (Fed) in the remaining year remains firm due to growing labor market concerns.

According to the CME FedWatch tool, traders see a 94.6% that the Fed will reduce interest rates by 50 basis points (bps) to 3.50%-3.75% in the remaining year.

On Tuesday, Fed Chair Jerome Powell also acknowledged labor market risks in a conference stating, "Downside risks to the US job market have risen". Powell didn't comment over the likely monetary policy action in the remaining year.

Meanwhile, trade relations between the US and China are going through a test as President Donald Trump has signaled that he would persuade Beijing to halt buying oil from Russia. However, trade frictions are unlikely to long last as Trump and Chinese leader XI Jinping are scheduled to meet later this month in South Korea to discuss over trade terms.

In the Eurozone, chances that French Prime Minister Sébastien Lecornu would survive the no-confidence vote by the cabinet have increased as he has suspended the controversial pension reform until at least after the 2027 presidential elections.