EUR/USD has recovered some of its earlier losses, increasing by 0.16% during the late hours of the North American session on Friday, in light of a limited economic calendar on both sides of the Atlantic. The US government shutdown has now extended to its 38th day, and with a light docket in Europe, the pair remains trading within familiar levels around 1.1560.
The EUR/USD pair has increased by 0.16% as market participants process the implications of a prolonged US government shutdown alongside disappointing sentiment indicators. The US Dollar Index has decreased to 99.53 as investors show a preference for the Euro, even in the face of market’s AI-driven selloff. Germany’s trade surplus has decreased to €15.3 billion, as stable inflation expectations in the US indicate a prudent perspective moving forward.
> The Euro experiences a slight increase as traders avoid the Dollar in light of the US government shutdown : The absence of data in the US has heightened uncertainty within the financial markets, evidenced by the decline of indices, which fell for various reasons. In the context of the government shutdown, there is a noticeable anxiety among investors regarding the potential overvaluation of AI-related companies, which has led to a sell-off across the four major US indices. As investors adopted a risk-averse stance, one would anticipate the Greenback to serve as a safe haven; however, traders chose to purchase the Euro rather than the Dollar. The US Dollar Index, which monitors the performance of six currencies, declines by 0.16% to 99.53. The University of Michigan Consumer Sentiment poll for November indicated that consumers in the US have become increasingly pessimistic about the economy. Simultaneously, the New York Fed disclosed that inflation expectations for the one-year horizon decreased, whereas those for the medium term remained stable, as indicated by the October survey. In Europe, the German Trade Balance indicated that the surplus decreased to €15.3 billion in September, falling short of the €16.8 billion forecast, after August’s surplus was revised down to €16.9 billion.
Latest FX Rate Trends : EUR/USD is expected to stay confined within the range of 1.15-1.16
- US Consumer Sentiment experienced a significant decline, dropping to 50.3 in November from 53.6 in October, indicating a decrease in household confidence, according to the University of Michigan. The survey indicated that inflation expectations for the upcoming year increased slightly to 4.7% from 4.6%, whereas the five-year forecast decreased to 3.6% from 3.9%.
- The New York Fed’s Consumer Expectations Survey indicated that one-year inflation expectations decreased to 3.2% in October, down from 3.4% in September. Expectations for both the three-year and five-year horizons remain steady at 3.0%.
- Federal Reserve Vice Chair Philip Jefferson indicated that the central bank ought to proceed with caution regarding further rate cuts as monetary policy nears a neutral position. He stated that decisions will be determined on a meeting-by-meeting basis and highlighted the “potential lack of government data due to the shutdown” as a reason for exercising caution.
- In Europe, a surprising drop in September retail sales has tempered optimism that was building after positive services sector data, presenting a challenge to the euro’s recovery.