The EUR/USD pair is currently positioned at 1.1654, following a temporary increase driven by the alleviation of U.S.–China trade tensions. US CB Consumer Confidence declines, indicating a decrease in household optimism. The Federal Reserve is anticipated to lower interest rates on Wednesday, as decision-makers continue to rely on data in light of the ongoing shutdown.
EUR/USD shows slight increases on Tuesday, but continues to trade within established ranges due to the absence of significant drivers while the US government remains closed. However, positive developments concerning the US-China trade war led to a depreciation of the Dollar and an appreciation of the Euro. The currency pair is currently trading at 1.1654, reflecting an increase of 0.09%.
> The Euro appreciates by 0.09% in the context of the US government shutdown and a prudent Federal Reserve outlook as the rate decision approaches : The agreement between the US and China regarding a trade framework has impacted the US Dollar, which is typically regarded as a safe-haven asset. Additionally, data indicated that US households are becoming increasingly pessimistic regarding the economy, as evidenced by the Conference Board Consumer Confidence data for October. In addition to this, traders focused on the Federal Reserve’s monetary policy decision scheduled for Wednesday. The Fed is anticipated to lower borrowing costs, despite being data-dependent; however, the government shutdown continues to influence both the markets and the Federal Reserve, relying on historical data. The Survey in Europe indicated a decline in one-year inflation expectations from 2.8% to 2.7%, whereas the three-year expectations held steady at 2.5%. Meanwhile, the European Central Bank is anticipated to maintain rates at 2% on Thursday, which may provide additional support to the shared currency.
Latest FX Rate Trends : EUR/USD gains limited by political unrest in France
- The US Dollar Index, which monitors the performance of the dollar against six currencies, has decreased by 0.11%, currently standing at 98.68.
- The Consumer Confidence index has decreased to 94.6 in October, down from a revised 95.6 in September, marking the second consecutive monthly decline. The survey indicated that households express concerns regarding job availability in the upcoming six months and the ongoing issue of elevated prices attributed to tariffs on imports.
- The survey revealed that inflation expectations for the upcoming year have risen by 5.9%.
- Market participants are closely monitoring the potential for a trade agreement between the United States and China, particularly in light of the upcoming meeting between President Trump and President Xi Jinping in South Korea on Thursday.
- The ongoing debate in France centers around the budget, particularly highlighting the potential implementation of a wealth tax. Sources has indicated its readiness to destabilize the government by the end of the week if the forthcoming budget does not incorporate a significant tax hike for the affluent.