The EUR/USD pair has moved into negative territory today, dropping below the 1.1600 level for the second day in a row amid a risk-off sentiment. Investors are currently awaiting the earnings report from NVIDIA while also processing US labor market data and orders in anticipation of Thursday’s Nonfarm Payrolls report. The currency pair is currently trading at 1.1586, showing a slight decline of 0.04%.
EUR/USD falls as worries about the AI bubble affect stocks, with traders looking ahead to the Nonfarm Payrolls report set for Thursday. Recent US jobless claims and orders data add to market fluctuations as investors await the FOMC minutes and consider the possibility of a rate cut in December. The Euro is under pressure from a stronger Dollar, with inflation in the Eurozone expected to stay near the ECB’s 2% target.
> The Euro faces a drop for the second day in a row, affected by uncertainties, a strong Dollar, and US economic data that negatively impact sentiment before NVIDIA’s earnings report : Worries about a possible AI bubble are affecting Wall Street, resulting in a drop in stocks. The recent US data has revealed the initial report of jobless claims after the government shutdown, while investors are also paying attention to the latest meeting minutes from the Federal Open Market Committee. In the last two weeks, Fed officials have expressed a more aggressive stance; nonetheless, the recent data has raised the chances of a 25-basis points rate cut at the upcoming December meeting. Nonetheless, a strong Nonfarm Payrolls report on Thursday might prompt a reevaluation regarding further easing in the upcoming month. The Euro is under pressure because of the Dollar’s strength. The US Dollar Index, which tracks the performance of the American currency against six others, has risen by 0.04% to reach 99.57. On Tuesday, there are no planned events in Europe. On Wednesday, economists expect inflation in the Eurozone to remain stable, with the Harmonized Index of Consumer Prices and core HICP likely to align closely with the European Central Bank 2% target.
Latest FX Rate Trends : EUR/USD experiences a downturn following mixed US economic data
- The US economic report revealed that Initial Jobless Claims for the week ending October 18 were recorded at 232,000, according to the Department of Labor. The Commerce Department announced that Factory Orders for August increased by 1.4%, meeting expectations, after a drop of -1.3% in July.
- Richmond Fed President Thomas Barkin noted that the Fed’s dual mandate is “in balance,” emphasizing the potential inflationary pressures while also acknowledging the challenges facing the labor market. He stressed that the absence of official economic data limits policymakers’ ability to assess the current stance of the Fed.
- Fed Governor Christopher Waller took a softer approach, describing the labor market as “weak.” He mentioned that inflation expectations remain stable and noted that core inflation is approaching the Fed’s 2% goal.
- Reports shows that markets now assign a 50% probability to a rate cut at the December meeting, up from 46% earlier today, but still lower than the 67% likelihood seen last week.
- In Europe, the HICP for October is expected to rise to 2.1% YoY, staying the same, with a monthly increase of 0.2%, up from 0.1%. The Core HICP is expected to remain unchanged at 2.4% year-over-year.