The euro experienced a decline, reaching a two-week low against the dollar. This movement is attributed to a stronger dollar, fueled by reduced expectations of a December rate cut by the Federal Reserve in the United States. Simultaneously, the European Central Bank is anticipated to maintain its current interest rate policy, contributing to the currency’s weaker position.
- The euro fell to $1.15, a two-week low.
- A stronger dollar weighed on the euro due to reduced expectations of a Fed rate cut.
- The cancelled October employment report and divided FOMC minutes contributed to the shift in sentiment regarding Fed policy.
- The ECB is expected to hold interest rates steady through 2026.
- Eurozone inflation is hovering near 2%, with stable economic growth and record-low unemployment.
- The European Commission raised its Eurozone growth forecast for 2025 to 1.3%, citing increased exports to the United States.
- Eurozone growth is projected to ease to 1.2% in 2026 before edging up to 1.4% in 2027.
The Euro’s outlook appears mixed. While the ECB’s stable interest rate policy and positive economic indicators like low unemployment and targeted inflation provide some support, the currency faces headwinds from a strengthening dollar driven by shifting expectations around US monetary policy. Upward revisions of Eurozone growth for 2025 also provides a glimmer of positive outlook.