EUR/USD shows marginal losses on Friday, trading at 1.1560 at the time of writing, after having hovered without a clear bias during the Asian and European sessions at a short distance of the 1.1540 support area., The broader trend remains negative as the USD draws support from the dismal market mood and dwindling bets of a Federal Reserve (Fed) rate cut in December, while Eurozone Inflation data has failed to cheer investors.
Eurozone’s preliminary Harmonized Prices for Consumer Inflation (HICP) offered no surprises and revealed that the headline inflation eased to a 2.1% year-on-year rate, from September’s 2.2% reading, while the core inflation remained steady, at 2.4%, from October last year. Monthly, consumer prices ticked up to 0.2% from the previous 0.1% with the core index accelerating to 0.3% from 0.1% in September.
The US Dollar has been drawing support by a “hawkish cut” by the Federal Reserve on Wednesday – which prompted investors to pare back hopes of another cut in December – and a deal between US President Trump and Chinese President Xi Jinping to maintain the trade truce between the world’s two major economies.
In the Eurozone, the European Central Bank met expectations and left its benchmark interest rate unchanged at 2%. ECB President Christine Lagarde reiterated that the bank is “in a good place” and conveyed a fairly optimistic message, dismissing the possibility of further rate cuts in the near term. The Euro ticked up after the event, but upside attempts remain limited so far.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD0.05%0.24%-0.09%0.31%0.22%0.40%0.19%EUR-0.05%0.19%-0.14%0.26%0.17%0.35%0.15%GBP-0.24%-0.19%-0.36%0.07%-0.02%0.16%-0.06%JPY0.09%0.14%0.36%0.41%0.33%0.49%0.28%CAD-0.31%-0.26%-0.07%-0.41%-0.10%0.09%-0.11%AUD-0.22%-0.17%0.02%-0.33%0.10%0.18%-0.02%NZD-0.40%-0.35%-0.16%-0.49%-0.09%-0.18%-0.22%CHF-0.19%-0.15%0.06%-0.28%0.11%0.02%0.22%
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Daily digest market movers: The Dollar remains firm in cautious marketsThe US Dollar remains bid on Friday, buoyed by a combination of dwindling hopes of a December rate cut, the positive impact of the Sino-US trade deal, and a mild risk aversion following declines in Wall Street on Thursday as earnings figures from Meta and Microsoft sparked fresh concerns about AI valuations and triggered sharp losses in tech stocks.The European Central Bank kept its Rate on the Deposit Facility at 2% for the third consecutive meeting on Thursday, and Christine Lagarde conveyed a fairly optimistic message, showing confidence about economic growth, although warning about the high uncertainty surrounding inflation.On Friday, ECB Governing Council members Martin Kocher, Kazakhs, and Muller have endorsed President Lagarde’s views, highlighting a gradual improvement of the economic projections and showing no urge to cut rates further in the near term. Their impact on the Euro, however, has been muted.In the US, the hawkish comments by Federal Reserve Chairman Jerome Powell have sent US Treasury yields surging, providing additional support to the US Dollar. The yield of the benchmark 10-year note has rallied more than 30 basis points since Wednesday to hit three-week highs at 4.10%The CME Group’s FedWatch Tool shows that expectations for a further rate cut in December have dropped to a 64.8% chance from 91% ahead of Wednesday’s monetary policy decision.Technical Analysis: EUR/USD hovers above a key support at 1.1540
The EUR/USD has broken the monthly triangle pattern, and the feeble recovery attempt seen after the ECB’s monetary policy decision has been capped below a previous support area at 1.1580, confirming the pair’s bearish bias. The 4-hour Relative Strength Index (RSI) is low but still above oversold levels, while the Moving Average Convergence Divergence reflects a strong negative momentum.
Bears are now focusing on the key support area around 1.1545 (October 9 and 14 lows). Below here, the 1.1500 round level is a plausible target ahead of the measured target of the triangle pattern at the 1.1450 area.
To the upside, the mentioned 1.1580 area – which held losses on October 22, 23, and 28 – is acting now as resistance. Further up, the reverse trendline, now around 1.1615, and Thursday’s high near 1.1635 are likely to challenge bulls ahead of the October 28 and 29 highs in the area of 1.1670.
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day.
EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy.
The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa.
The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control.
Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency.
A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall.
Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.