EURUSD has hit its lowest level since November 2023, pressured by a stronger dollar following Donald Trump’s win of the presidency and a 2.6% rise in inflation last month.
Wednesday’s figures from the Bureau of Labor Statistics were in line with what markets have anticipated:
Head of the St Louis Fed, sounded a cautionary note in a recent speech, warning that inflation could get stuck above 2% or even rise higher.
Meanwhile, he suggested that the likelihood of a sharp downturn in the labour market may be diminishing and reiterated his support for a measured approach to rate cuts.At the time of writing, markets are pricing in an 82.5% probability of a 25bp cut next month (source: CME FedWatch Tool).
Other factors putting negative pressure on the EUR include:
Amid these developments, markets have adjusted their expectations for the ECB’s future monetary policy, with market participants now expecting a 25bp cut in December and lower odds of a larger cut.More By This Author:Bitcoin Hits $90,000! How High Can It Go? This Week: Trump’s Win Triggers Market Turmoil In China Ahead Of Earnings XAUUSD & Brent Decline After Fed Cut And Trump Win
