EUR/USD remains steady at approximately 1.1550 on Monday, showing little movement as the Greenback recovers some of its earlier losses following reports that the White House supports a deal to resolve the US shutdown in the near future. Currently, the pair is trading steady at 1.1560.
EUR/USD remains stable as the White House’s support for a shutdown agreement constrains Euro appreciation. The US government shutdown extends to 41 days; Federal Reserve commentary influences market sentiment in the context of limited data releases. Weak US jobs and sentiment data underscore the existing strain, whereas ECB officials continue to adopt a cautious policy stance.
> Speculation regarding the US government’s reopening is capping the Euro’s advance : The White House has indicated its backing for a bipartisan agreement designed to facilitate the reopening of the government in the near term. Although the legislation has been voted on and passed in the US Senate, House Representatives are required to return to Washington. House Speaker Mike Johnson will provide a 36-hour notice for their return to the Capitol following the Senate’s passage of the bill. As the US government shutdown reached its 41st day, market participants remained focused on the speeches delivered by Federal Reserve officials, given the absence of economic data. Last week, the Challenger report disclosed troubling jobs data indicating that private companies are implementing layoffs. Meanwhile, the Consumer Sentiment prepared by the University of Michigan indicated that households are becoming increasingly pessimistic regarding the economy. In Europe, the agenda was limited, showcasing European Central Bank representatives, including Vice President Luis de Guindos, along with policymakers François Villeroy de Gelhaus and Joachim Nagel.
Latest FX Rate Trends : EUR/USD stabilizes, as the US government reopening approaches
- The US Dollar Index, which monitors the performance of the American currency against six others, remains steady at 99.56.
- The Trump administration indicated its backing for the bipartisan agreement reached to conclude the US government shutdown, which was sanctioned on Sunday.
- Fed Governor Stephen Miran expressed a dovish stance, indicating a potential 50 bps cut in the upcoming December meeting. In contrast, St. Louis Fed’s Alberto Musalem remarked that the economy continues to show resilience and that inflation is nearer to 3% than to 2%.
- Earlier, San Francisco Fed Mary Daly remarked that goods inflation has been “pretty contained,” yet recognized that recent rate cuts have supported the labor market while contributing some upward pressure on overall prices.
- According to last week’s report, employers have disclosed 153,000 job cuts in October — marking the highest figure for that month in two decades. Current money market indicators suggest a 66% probability of a Federal Reserve rate cut in December, an increase from 62% the previous week. This shift highlights the rising expectations for policy easing in light of indications of a slowing labor market.
- As a result, the differing monetary policies of the European Central Bank and the Federal Reserve indicate that additional upside for EUR/USD is anticipated.
- On Monday, European Central Bank Vice President Luis de Guindos stated that the existing interest rates are “appropriate,” highlighting that inflation is approaching the 2% target. Meanwhile, other policymakers have advised prudence, highlighting the necessity to stay alert to persistent price pressures.
- As we look forward, market participants are poised to focus on the upcoming release of the German and Eurozone ZEW Economic Sentiment Index on Tuesday, seeking new insights into the growth prospects of the region.