The EUR/USD pair experiences a decline during the North American session, slipping 0.31% as the US dollar maintains its strength, reflecting a sense of relief following President Trump’s moderated stance on China. The currency pair is currently trading at 1.1599, following a peak of 1.1655.
The Euro declines as the DXY approaches 99.00, reflecting relief in geopolitical tensions. Expectations surrounding the reopening of the US government and the resumption of trade discussions are bolstering sentiment for the Dollar. Attention is drawn to the speeches of ECB’s Lagarde and De Guindos, while the Eurozone data flow continues to show subdued activity.
> The dollar strengthens as Trump indicates potential trade discussions with Xi, while optimism regarding a government shutdown increases : The shared currency remains stable as the US Dollar Index, which measures the dollar’s value against a basket of six currencies, has increased by 0.37% to 98.95, reflecting the absence of US economic data while the government shutdown appears likely to continue. In the meantime, Kevin Hasset indicated that the shutdown might conclude “sometime this week.” The US Senate Minority Leader Schumer indicated that he and Democrat House leader Jeffries contacted Trump on Tuesday to discuss potential negotiations regarding a possible reopening of the government. In addition to this, the US Dollar experienced an uptick due to reports indicating that US President Donald Trump is scheduled to meet with Chinese President Xi Jinping next week. This meeting aims to enhance trade negotiations as the second 90-day trade truce approaches its conclusion on November 10. The US economic calendar shows no significant releases for Wednesday and Thursday; however, the Bureau of Labor Statistics is set to disclose the inflation report for September in the United States. In Europe, market participants are closely monitoring upcoming speeches from European Central Bank Vice-President Luis De Guindos and President Christine Lagarde.
Latest FX Rate Trends : The Euro remains under pressure as traders anticipate new catalysts
- Market participants are closely monitoring the upcoming release of US CPI in anticipation of next week’s Federal Reserve monetary policy decision. The US central bank is anticipated to reduce rates by 25 basis points, bringing them to the 3.75% – 4% range. Traders are already factoring in a further 0.25% decrease for the December meeting.
- Economist indicated that Euro Zone banks could face pressure if US Dollar funding were to diminish due to concerns surrounding Trump’s policies. Dollar funding has captured the attention of central bankers ever since Trump declared trade tariffs.
- Next week, the ECB is anticipated to maintain rates at their current levels, with probabilities at 98%.
- Meanwhile, the prolonged resolution of the Russia – Ukraine conflict may exert pressure on the Euro, notwithstanding Trump’s attempts to broker a deal between Russian President Vladimir Putin and Ukraine’s Volodymyr Zelenskyy.