EUR/USD experiences a pullback in the North American session, influenced by political instability in France and the strengthening of the US Dollar, coinciding with the sixth day of the government shutdown in the US. The currency pair is currently trading at 1.1714, reflecting a decrease of 0.24%.
France’s PM Sebastien Lecomu has resigned, causing unease among investors and reigniting worries regarding the political stability of the Eurozone. The US government shutdown has now reached its sixth day, with Trump cautioning that layoffs could be imminent if the Senate fails to resolve the ongoing standoff. Eurozone data presents a mixed picture: Retail sales are experiencing a slowdown, whereas the Sentix sentiment indicates a modest recovery from the pessimism observed in September.
> The Euro is declining towards 1.17 as Lecomu’s resignation and ongoing US fiscal gridlock increase the demand for safe-haven assets, particularly the Greenback : The market sentiment continues to be optimistic, yet the euro weakens following the announcement of French Prime Minister Sebastien Lecomu’s resignation. The absence of updates concerning negotiations for the re-opening of the US government results in traders relying on economic indicators from Europe and remarks from central bank representatives. The upcoming US economic calendar includes the release of the University of Michigan Consumer Sentiment survey this Friday. The current dynamics of discussions between the White House and Democrats may pave the way for the forthcoming release of previously delayed data in the US. Recently, US President Donald Trump indicated that layoffs might occur if the Senate vote on the shutdown does not succeed, noting that negotiations with Democrats are still in progress. The European Commission plans to introduce tariffs of 50% on global steel imports that exceed a quota established at 2013 levels. Recent economic data indicates that Retail Sales experienced a slowdown in August when compared to year-over-year figures. In October, the Eurozone Sentix index showed a modest improvement, contrasting with the excessive pessimism observed in September.
Latest FX Rate Trends : The Euro remains steady at approximately 1.1700
- Currently, Kansas City Fed President Jeffrey Schmid has stated that the Fed needs to uphold its credibility regarding inflation and that inflation levels are excessively high. He stated that monetary policy is suitably adjusted.
- In August, Eurozone Retail Sales experienced a 1% year-over-year increase, a decline from the 2.2% recorded in July, but largely consistent with the estimates observed over the past twelve months. On a monthly basis, figures increased as anticipated by 0.1%, recovering from August’s -0.5% MoM contraction.
- The Sentix Index in the Eurozone showed an improvement from -9.2 to -5.4, surpassing the anticipated figure of -8.5.
- Money markets are currently reflecting a complete pricing of a 25-basis-point Fed cut at the October 29 meeting, with the odds positioned at 94%, as indicated by Prime Market Terminal’s interest rate probability tool.