The EUR/USD experiences a decline during the North American session, down 0.30%, as the Greenback benefits from a robust recovery amid speculation that the Federal Reserve may maintain rates at their current level. The pair is currently at 1.1589, having peaked at a daily high of 1.1624.
EUR/USD has pulled back to 1.1589 as market participants favor the Dollar, driven by the anticipation that the Federal Reserve might maintain current interest rates in December. The reopening of the US government is contributing to market volatility as we approach the NFP report and earnings season, while concerns over an AI bubble are driving investors towards safe-haven assets. ECB’s de Guindos indicates that inflation is aligning with the target; however, he cautions that increasing tariffs and sovereign debt pose ongoing risks.
> Euro declines by 0.30% as increasing risk aversion and renewed caution from the Fed bolster the Greenback at the start of the new trading week : Risk aversion supports demand for the US Dollar as the reopening of the US government brings forth a wealth of data, highlighted by the upcoming Nonfarm Payrolls report on Thursday. The US Bureau of Labor Statistics is set to publish those figures, along with the Real Earnings report, on Friday. Meanwhile, investors acquired Greenback due to concerns over a potential AI bubble, as NVIDIA is poised to announce earnings on Wednesday, which may influence market sentiment ahead of critical US data. The schedule in the US is relatively sparse on Monday, with the exception of activities involving Federal Reserve officials. Vice-Chair Philip Jeffers exhibited a somewhat dovish stance, whereas Fed Governor Christopher Waller advocates for the persistence of the easing cycle during the December meeting. Earlier, reports says, showing an improvement as current business conditions exceeded expectations. European Central Bank Vice President Luis de Guindos conveyed assurance that Eurozone inflation is progressing towards alignment with the ECB’s price-stability objective. He cautioned that increasing tariffs and high levels of sovereign debt present risks that could lead to a sudden change in market sentiment.
Latest FX Rate Trends : Euro declines amid widespread strength of the US Dollar
- The US Dollar Index, which monitors the dollar’s value relative to a group of six currencies, has increased by 0.20% to reach 99.47.
- The recent survey indicated a more robust recovery in current manufacturing conditions than anticipated, highlighted by increases in new orders and employment, alongside a continued decline in prices paid. However, the six-month business outlook has notably softened, decreasing to 19.1 from 30.3, indicating a decline in forward-looking confidence.
- The Vice Chair of the Federal Reserve, Philip Jefferson, indicated that the potential for inflation to rise has probably lessened, whereas the threats to the labor market have grown. He observed that companies continue to be cautious regarding hiring or layoffs, and described the existing monetary policy as “somewhat restrictive.”
- Fed Governor Christopher Waller indicated that a weak labor market supports the case for a rate cut in the upcoming December meeting. He noted that when the effects of the tariff are removed, inflation would align more closely with the Fed’s 2% target.
- The current landscape of money markets indicates a more hawkish stance, as per data revealing a 43% likelihood of a 25-basis-point cut during the December meeting—suggesting a 57% probability that the Fed will maintain current rates.