- The EUR/USD pair is trading around 1.15270 USD per euro, under downward pressure due to monetary policy differences between the ECB and the Fed as well as the US government shutdown.
- Final inflation data from the eurozone, combined with weak price pressure in France, suggest that the ECB will maintain its current policy at least until year-end, supporting the euro.
- The Fed has not confirmed a further rate cut in December, which, together with fiscal uncertainty in the US, strengthens the dollar and affects the short-term dynamics of EUR/USD.
- The EUR/USD pair is trading around 1.15270 USD per euro, under downward pressure due to monetary policy differences between the ECB and the Fed as well as the US government shutdown.
- Final inflation data from the eurozone, combined with weak price pressure in France, suggest that the ECB will maintain its current policy at least until year-end, supporting the euro.
- The Fed has not confirmed a further rate cut in December, which, together with fiscal uncertainty in the US, strengthens the dollar and affects the short-term dynamics of EUR/USD.
The EUR/USD pair is currently trading around 1.15270 USD per euro. The market is under downward pressure, mainly due to differences in monetary policy between the European Central Bank and the US Federal Reserve.
Souce: xStation5
What is shaping the EUR/USD today?
The dollar remains relatively strong following the Fed’s recent 25 basis point rate cut. The central bank, however, signaled the possibility of pausing further reductions, which has strengthened the US currency and limited the euro’s gains. Investors expect the Fed to respond cautiously to upcoming economic data before making any decisions on potential further adjustments to monetary policy.
In the eurozone, market attention is focused on the latest macroeconomic releases. Preliminary inflation data for October showed the CPI at 2.1% year-on-year, while core inflation stood at 2.4% y/y. These results are in line with analyst expectations and suggest that the ECB is likely to maintain its current policy at least until the end of the year.
In France, data on inflation and industrial production were released. Annual inflation fell to 0.9% y/y, with minimal monthly price changes. Weak price pressure reduces the need for interest rate hikes, supporting the ECB’s monetary policy stability and providing backing for the euro.
Data releases from France and the eurozone as a whole are important for the EUR/USD pair, as they shape market expectations regarding future ECB decisions and may support the common currency amid growing global market uncertainty. At the same time, the Fed's caution and the lack of confirmation of further rate cuts in the US keep the dollar volatile, which affects the dynamics of the EUR/USD exchange rate in the short term.
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