- EUR/USD rebounds above 1.0500 as the USD gives up some gains after the US inflation data release.
- The US inflation data grew in line with estimates in November.
- The ECB is expected to cut its Deposit Facility rate by 25 bps on Thursday for the third meeting in a row.
EUR/USD recovers intraday losses and returns above the psychological support of 1.0500 in Wednesday’s North American session after the release of the United States (US) Consumer Price Index (CPI) data for November, which showed signs of stickiness in price pressures. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, gives up intraday gains and slides below 106.50.
The US CPI report showed that price pressures rose expectedly. Annual headline inflation accelerated to 2.7%, as expected, from the October reading of 2.6%. In the same period, the core CPI – which excludes volatile food and energy prices – rose in line with estimates and the prior release of 3.3%. The month-on-month headline and core CPI rose expectedly by 0.3%.
Market expectations for the Federal Reserve’s (Fed) to cut interest rates by by 25 bps to 4.25%-4.50% in the policy meeting on December 18 remains firm after the US inflation data release. According to the CME FedWatch tool, the probability for the Fed to reduce interest rates by 25 bps next week remains close to 88%.
Daily digest market movers: EUR/USD stays broadly under pressure with ECB policy in focus
- EUR/USD remains under pressure broadly on firm expectations that the European Central Bank (ECB) will reduce its Deposit Facility rate by 25 basis points (bps) to 3% in the policy meeting on Thursday. As for the ECB, a rate cut would be the third straight one in a row and the fourth this year.
- A 25-bps interest rate reduction by the ECB is widely anticipated as policymakers are increasingly convinced that inflation is under control and increasing signs that Eurozone business activity is struggling. Meanwhile, a handful of ECB officials see risks of inflation undershooting the central bank’s target due to potential tariff threats by US President-elect Donald Trump and weak domestic demand.
- With traders pricing in an ECB rate cut on Thursday, investors will pay close attention to President Christine Lagarde’s comments in the press conference after the policy decision for fresh interest-rate guidance. Lagarde could deliver somewhat dovish remarks due to political instability in Germany and France and the potential adverse impact of Trump’s tariffs on the export sector.
- Meanwhile, German Chancellor Olaf Scholz is set to submit a request for a no-confidence vote on December 16, a necessary precursor for holding elections on February 23, 2025, Reuters report. German government collapsed after Olaf dismissed Finance Minister Christian Lindner, dissolving the three-party coalition.
Euro PRICE Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.16% | 0.26% | 0.47% | 0.05% | 0.34% | 0.34% | 0.04% | |
| EUR | -0.16% | 0.10% | 0.32% | -0.11% | 0.18% | 0.17% | -0.12% | |
| GBP | -0.26% | -0.10% | 0.19% | -0.21% | 0.08% | 0.08% | -0.23% | |
| JPY | -0.47% | -0.32% | -0.19% | -0.43% | -0.14% | -0.15% | -0.44% | |
| CAD | -0.05% | 0.11% | 0.21% | 0.43% | 0.29% | 0.29% | -0.02% | |
| AUD | -0.34% | -0.18% | -0.08% | 0.14% | -0.29% | -0.01% | -0.31% | |
| NZD | -0.34% | -0.17% | -0.08% | 0.15% | -0.29% | 0.00% | -0.30% | |
| CHF | -0.04% | 0.12% | 0.23% | 0.44% | 0.02% | 0.31% | 0.30% |
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).
Technical Analysis: EUR/USD skates on thin ice near 1.0500
EUR/USD struggles near the psychological figure of 1.0500. The outlook of the major currency pair remains bearish as the 20-day EMA near 1.0565 acts as key resistance for the Euro (EUR) bulls.
The 14-day Relative Strength Index (RSI) wobbles near 40.00. Should the RSI fall below this level, a bearish momentum will trigger.
Looking down, the November 22 low of 1.0330 will be a key support. On the flip side, the 50-day EMA near 1.0700 will be the key barrier for the Euro bulls.
Economic Indicator
ECB Rate On Deposit Facility
One of the European Central Bank's three key interest rates, the rate on the deposit facility, is the rate at which banks earn interest when they deposit funds with the ECB. It is announced by the European Central Bank at each of its eight scheduled annual meetings.
Read more.Next release: Thu Dec 12, 2024 13:15
Frequency: Irregular
Consensus: 3%
Previous: 3.25%
Source: European Central Bank
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD accelerates losses to 1.0930 on stronger Dollar
The US Dollar's recovery regains extra impulse sending the US Dollar Index to fresh highs and relegating EUR/USD to navigate the area of daily troughs around 1.0930 in the latter part of Friday's session.
GBP/USD plummets to four-week lows near 1.2850
The US Dollar's rebound keep gathering steam and now sends GBP/USD to the area of multi-week lows in the 1.2850 region amid the broad-based pullback in the risk-associated universe.
Gold trades on the back foot, flirts with $3,000
Gold prices are accelerating their daily decline, steadily approaching the critical $3,000 per troy ounce mark as the Greenback's rebound gains extra momentum and US yields tighten their retracement.
Can Maker break $1,450 hurdle as whales launch buying spree?
Maker holds steadily above $1,250 support as a whale scoops $1.21 million worth of MKR. Addresses with a 100k to 1 million MKR balance now account for 24.27% of Maker’s total supply. Maker battles a bear flag pattern as bulls gather for an epic weekend move.
Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.