EUR/USD experienced a pullback on Thursday following a packed economic schedule across both sides of the Atlantic. The recent inflation data in the US, coupled with the European Central Bank’s decision to maintain interest rates steady during the final meeting of the year, had minimal impact on the value of the euro. Currently, the pair is trading at 1.1722, reflecting a decrease of 0.16%.
EUR/USD experiences a decline of 0.16%, settling at 1.1722 as market participants assess the implications of mild US inflation alongside strong jobless claims figures. ECB maintains rates steady, with Lagarde indicating a meeting-by-meeting approach and suggesting that the easing cycle could be concluded. Market participants are redirecting their attention to the US Core PCE and Michigan sentiment as they seek new insights into the Federal Reserve’s policy trajectory for 2026.
> The Euro experiences a slight decline following a day filled with significant data, as subdued US inflation and a measured approach from the ECB do not generate the expected momentum : Recent data from the US indicated that inflation figures for November, encompassing both headline and core metrics, have fallen to their lowest point since early 2021, as reported. While this development paves the way for increased convenience, a concerning dual challenge arises as jobless claims for the previous week showed improvement, surpassing economists’ projections. In Brussels, the ECB maintained rates unchanged as anticipated, and a sources suggested that the cycle of rate cuts is “most likely over,” according to the headline. ECB President Christine Lagarde stated that the decision was unanimous and emphasized their commitment to a “meeting-by-meeting approach.” Following the data release and the ECB’s decision, the EUR/USD held steady at approximately the same levels, remaining unchanged. Market participants are now concentrating on the upcoming release of the Fed’s preferred inflation measure, the Core Personal Consumption Expenditures Price Index, in conjunction with the final release of the University of Michigan Consumer Sentiment Index. In Europe, market participants will focus on the addresses from ECB’s Mario Cipollone and Martin Kocher, along with the Current Account data for October.
Latest FX Rate Trends : Limited liquidity maintains the Euro’s stability
- In November, US inflation showed signs of further cooling, as the Consumer Price Index recorded a 2.7% year-over-year increase. This marks a decrease from the 3.0% figure noted in September and falls short of market expectations, which anticipated a 3.1% rise, according to data from the US Bureau of Labor Statistics. Core inflation, excluding food and energy, decreased to 2.6% year-over-year from 3.0%, indicating a continuation of the disinflation trend.
- The Department of Labor revealed a decrease in the number of Americans filing for unemployment benefits. Initial Jobless Claims for the week ending December 13 increased to 224K, a decrease from the previously revised figure of 237K, and below the anticipated 225K.
- In light of the current situation, the anticipation that the fed will lower rates in January has remained steady at 2.4%. However, money markets had anticipated 60 basis points of easing by the end of 2026, with the initial reduction projected for June.
- Expectations for a rate cut by the Fed at the upcoming meeting on January 28 hold steady at 24%, as indicated by probability data. Nonetheless, for the full year ahead, investors had priced in 60 basis points for easing, with the first cut anticipated in June.
- Chicago’s Fed President Austan Goolsbee remarked that the inflation print is “encouraging,” and that a “clearer understanding of declining inflation,” could pave the way for additional interest rate reductions. Despite these remarks, he maintained a slightly hawkish stance, expressing “unease regarding premature rate reductions.”
- The European Central Bank maintained interest rates for the fourth consecutive meeting, with the Deposit Facility remaining at 2.00%, the Main Refinancing Operations rate at 2.15%, and the Marginal Lending Facility at 2.40%, consistent with market expectations.