The euro strengthened against the dollar, reaching its highest level since mid-November. This movement was largely driven by investors selling the dollar in response to disappointing US economic data releases and expectations of further interest rate cuts by the Federal Reserve. In contrast, the European Central Bank is anticipated to maintain its current interest rate policy.
- The euro climbed toward $1.16, reaching its strongest level since November 18.
- US retail sales rose less than forecast in September.
- ADP data showed job losses intensifying in the four weeks ending November 8.
- US producer price inflation rose 0.3% month-over-month.
- The Federal Reserve is expected to deliver its third rate cut of the year in December.
- The European Central Bank is expected to keep interest rates unchanged throughout 2026.
- ECB policymakers noted that the central bank “is in a good place”.
- Concerns persist over strong inflation in groceries and services within the Eurozone.
The described market conditions suggest a potentially favorable outlook for the euro in the short term. The currency is benefiting from weakness in the dollar driven by expectations of looser monetary policy in the United States. At the same time, the relative stability and positive assessment of the Eurozone’s economic position are providing support for the euro. However, lingering concerns about inflation in specific sectors within the Eurozone highlight the need for continued monitoring of the economic landscape.