EUR/USD shows an upward movement during the North American session on Thursday, increasing by 0.41% following the Federal Reserve’s decision to lower interest rates, coupled with the release of disappointing job data in the United States. Currently, the pair is trading at 1.1742, having recovered from daily lows of 1.1682.
The Euro gains traction amid widespread Dollar weakness, as ECB President Lagarde indicates that the current policy stance is suitably aligned for the time being. The increase in US jobless claims and the narrowing of the trade deficit support the perspective that the US economy is experiencing a slowdown. The Federal Reserve reduced rates by 25 basis points, with Powell indicating a willingness to adapt, which has heightened expectations for further rate cuts extending into early 2026.
> The Euro gains momentum following a dovish stance from the Fed, coupled with disappointing US labor figures that heighten expectations for additional policy easing : The latest US economic data presents a mixed picture, highlighted by an increase in the number of Americans applying for unemployment benefits, signaling potential weakness in the jobs market. Subsequently, the trade deficit showed a contraction in September, according to the sources. On Wednesday, the Federal Reserve reduced rates by 25 basis points to a range of 3.50%-3.75%. However, the majority of officials in the dot-plot indicated that the median expectation was for the Fed funds rate to conclude at a higher level. In the meantime, Fed Chair Jerome Powell indicated that the Federal Reserve is “well positioned to determine the extent and timing of additional adjustments to our policy rate based on the incoming data, the evolving outlook and the balance of risks.” This week, the economic calendar in the US will showcase remarks from Federal Reserve officials, including Anna Paulson from Philadelphia, Beth Hammack from Cleveland, and Austan Goolsbee from Chicago. In the Eurozone, the schedule was devoid of significant events; however, European Central Bank President Christine Lagarde indicated that the current policy stance is favorable and that an update to the bank’s projections may occur in December.
Latest FX Rate Trends : EUR/USD strengthened due to the weakness of the US Dollar
- The US Dollar Index, which measures the value of the dollar against six currencies, has decreased by 0.29% to 98.34 as the selloff of the dollar continues in the wake of the Fed’s decision.
- The Department of Labor reported that US Initial Jobless Claims for the week ending December 6 rose to 236K, surpassing the prior week’s upwardly adjusted figure of 192K. In contrast, Continuing Claims for the week ending November 29 decreased to 1.838 million from 1.937 million, indicating a potential stabilization in longer-term unemployment.
- The US Goods and Services Trade Balance contracted to –$52.8 billion in September, a notable improvement from –$59.3 billion in August, and surpassed forecasts that anticipated a widening deficit of –$63.3 billion.
On Wednesday, Fed Chair Powell indicated that the central bank is “well positioned” to “wait and see” how the economy evolves, after a cumulative easing of 75 basis points this year. He noted that the Fed funds rate is approaching the upper limit of neutrality estimates and that they will monitor economic data, which could be “distorted.” - In Europe, Mario Centeno, the former central-bank Governor of Portugal, has surfaced as a possible candidate to take over as the next Vice-President of the ECB, succeeding the Spanish Luis De Guindo, whose term is set to expire in May 2026.