The EUR/USD pair shows signs of recovery on Friday, rising above 1.1600 as the Greenback experiences a significant decline, influenced by the intensification of the trade conflict between the US and China. Nonetheless, the potential for gains appears limited due to the ongoing political turmoil and disappointing data emerging from the Eurozone. The currency pair is currently trading at 1.1606, reflecting an increase of 0.37%.
The EUR/USD pair breaks its four-day losing streak as Trump cautions about “massive tariff increases” on China, leading to a selloff of the US Dollar. Macron has reappointed Lecornu as Prime Minister, committing to resolve political instability and ensure the successful delivery of France’s 2026 budget. The appreciation of the Euro is constrained by disappointing economic indicators from the Eurozone and ongoing investor hesitance due to the US government shutdown.
> The dollar declines amid fresh tariff threats; France’s leadership change brings relief to Euro bulls : On Friday, the Euro showed signs of recovery after experiencing four consecutive days of losses, even amidst the ongoing political turmoil in France. Recently, French President Emmanuel Macron has reappointed Sébastien Lecornu as Prime Minister, following his resignation from the position earlier this week. Lecornu accepted Macron’s offer and stated that he will “do everything possible to provide France with a budget by the end of the year and to address the daily life issues of our fellow citizens.” He stated, “We must put an end to this political crisis that exasperates the French people and to this instability that is harmful to France’s image and its interests.” The Euro strengthened, reflecting a sense of relief, supported by the weakness of the US Dollar. The Greenback weakened after Trump’s warnings of a “massive increase of tariffs” on China, highlighting the recent aggressive export restrictions on rare-earth minerals. Consumer Sentiment remained stable in October, even in light of the US government shutdown and ongoing worries regarding the labor market and inflation.
Latest FX Rate Trends : EUR/USD shows upward movement, in spite of the Fed’s hawkish remarks
- The US Dollar Index, which monitors the value of the dollar relative to a basket of six currencies, has decreased by 0.52%, now standing at 98.87.
- The UoM Consumer Sentiment experienced a minor decline to 55 from 55.1, surpassing expectations for a more significant downturn. The survey indicated a decrease in sentiment among Democrats. Overall, consumers exhibited a pessimistic outlook regarding their future personal finances, and the conditions for purchasing durable goods appeared unfavorable. The survey indicated that inflation expectations for the one-year horizon decreased slightly from 4.7% to 4.6%, while the five-year outlook remained stable at 3.7%.
- St. Louis Fed President Alberto Musalem indicated that the central bank’s dual mandate is under pressure, as inflation remains high while the labor market exhibits signs of weakening. He observed that the policy is presently positioned between “modestly restrictive and neutral,” while emphasizing that, in general, financial conditions continue to be accommodative.
- The money markets are currently reflecting a complete pricing in of a 25-basis-point rate cut at the Federal Reserve’s meeting on October 29, with the probability standing at 94%, as indicated by the Prime Market Terminal probability tool.