EUR/USD remains stable on Monday, showing slight increases of over 0.10%, while the US Dollar consolidates in the wake of dovish remarks from Federal Reserve officials. Despite the rising expectations for a rate cut, the pair is currently trading at 1.1525, having reached a daily high of 1.1550.
EUR/USD moves upward as the US Dollar stabilizes, even with increasing anticipations for Federal Reserve easing in the upcoming month. The robust NFP figures and varied sentiment data underscore the resilience of the US economy, maintaining traders’ attention on forthcoming releases. The Federal Reserve Waller and Williams support the possibility of a December cut, enhancing dovish expectations in anticipation of the PPI and Retail Sales data.
> Euro experiences slight increases as market participants adjust expectations for a potential rate cut in December : Last week, US economic data indicated that the labor market is performing better than anticipated, with Nonfarm Payrolls for September increasing by 119,000 compared to the expected 50,000. The week concluded with varied outcomes from the University of Michigan Consumer Sentiment and S&P Global Flash PMIs; however, the economy continues to demonstrate resilience. The Federal Open Market Committee exhibits a division in opinions; however, remarks from Federal Reserve officials have heightened the likelihood of a potential reduction in borrowing costs during the meeting scheduled for December 9-10. Recently, Fed Governor Christopher Waller indicated that the current weakness in the job market justifies additional easing in December; however, he expressed uncertainty regarding January. Last Friday, New York Fed President John Williams indicated the possibility of a rate cut. This week, market participants are focused on the upcoming economic data releases, notably the Producer Price Index and Retail Sales. Additionally, Wednesday will bring Initial Jobless Claims, adjusted in consideration of the Thanksgiving holiday.
Latest FX Rate Trends : The Euro is in a consolidation phase, anticipating additional data from the US
- The US Dollar Index, which assesses the performance of the American dollar relative to a selection of six other currencies, remains unchanged at 100.16. Nonetheless, the Euro’s limited progress may also be affected by the shortened trading week due to US holidays. However, economic data from the Eurozone on Friday could significantly impact the EUR/USD dynamics ahead of the week.
- Federal Reserve Governor Christopher Waller maintains a dovish stance, supporting a rate cut in December. Waller remarked that “most of the private sector and anecdotal data we’ve gotten is that nothing has really changed.” The labor market is exhibiting signs of softness — it is persistently deteriorating.
- According to the reports, market participants perceive an 80% likelihood of a rate cut in December. That represents a significant increase from approximately 31% last week, prior to the dovish stance indicated by New York Fed’s John Williams.
- In the European session, the German IFO Business Climate decreased from 88.4 to 88.1 in November, falling short of expectations. In addition, the agenda included remarks from European Central Bank member and Bundesbank President Joachim Nagel, who noted that food inflation “remains stubborn” and emphasized that the ECB is attentive to significant price increases in services as well. He stated that the existing position is suitable.