EUR/USD is experiencing a modest increase during the North American session, rising by 0.42% as speculation mounts regarding the Federal Reserve’s potential continuation of easing policy, coinciding with a limited economic calendar on both sides of the Atlantic. The currency pair is currently trading at 1.1757, having rebounded from daily lows of 1.1706.
The EUR/USD pair has increased by 0.42%, reaching 1.1757, following a rebound from 1.1706 as the Dollar experiences a decline due to easing speculation. Federal Reserve officials have identified irregularities in the Consumer Price Index; however, the markets continue to anticipate the first rate cut in 2026 to occur around mid-June. ECB policymakers are minimizing hawkish signals, as traders look forward to crucial growth data from the US and Eurozone.
> The Euro continues to strengthen in the absence of significant data, with market participants concentrating on dovish expectations from the Federal Reserve and the varied statements from central banks : Market data in the US was limited as traders analyzed remarks from Federal Reserve officials, notably Governor Stephen Miran and Cleveland Fed President Beth Hammack. Both maintained their dovish and hawkish positions, respectively, while agreeing that the recent release of the Consumer Price Index for November exhibited some irregularities as a result of the 43-day US government shutdown. In the meantime, there is a strong belief that the Fed will implement rate cuts next year, with the initial 25 basis points reduction anticipated on June 17. In Europe, various officials from the European Central Bank, with Isabel Schnabel at the forefront, noted that she “didn’t say rates should be raised.” In the upcoming week, the European agenda will include Gross Domestic Product data for Germany and Spain. The upcoming schedule in the US is set to be quite active, featuring the release of the ADP Employment Change 4-week average, followed by GDP figures for Q3, along with Industrial Production and Consumer Confidence data.
Latest FX Rate Trends : US Dollar weakness, ECB comments enhance the Euro
- The weakness of the US Dollar continues to support the shared currency. The US Dollar Index, which measures the value of the dollar against a basket of six currencies, declines by 0.45%, now standing at 98.27, providing a favorable condition for the Euro.
- Cleveland Fed President Beth Hammack adopted a hawkish stance, cautioning that the Consumer Price Index for November might have downplayed yearly inflationary pressures because of data inconsistencies. She noted that the neutral interest rate may exceed typical assumptions, advocating for prudence regarding additional easing measures.
- In a separate statement, Fed Governor Stephen Miran highlighted discrepancies in CPI data associated with the government shutdown. He stated that recent data supports his evaluation of the current economic landscape and emphasized that further policy rate cuts are probable moving forward.
- On the previous Thursday, the year-on-year inflation rate in the US for November decreased to 2.7%, a decline from the earlier figure of 3%. However, experts advised that the data must be analyzed cautiously, as the 43-day US government shutdown may have skewed certain aspects of the economic reporting.
- ECB Schnabel indicated that no rate hikes are anticipated in the near term, and that “at some point we will need to increase rates again.” She maintained a firm stance, observing that there are “more inflationary than disinflationary forces at work.”
- ECB’s Vujcic indicated that the risks associated with inflation and growth are currently balanced, noting that the forthcoming adjustment in rates could proceed in either direction. Meanwhile, Kazimir indicated that the ECB maintains a flexible approach and expressed greater concern regarding long-term growth prospects.