EUR/USD ticks lower in thinned Thanksgiving trading
- The Euro finds resistance above 1.1600 and retreats below the 1.1580 level.
- The US Dollar ticked up from lows but maintains its broader bearish tone intact.
- Growing hopes of Fed interest rate cuts are likely to keep USD rallies limited.
EUR/USD shows moderate losses heading into the European midday, trading near 1.1590 after rejection above 1.1600 earlier on Thursday. The minutes of the latest European Central Bank (ECB) meeting reaffirmed that the easing cycle has come to an end, while the Federal Reserve is expected to cut interest rates further. This is keeping US Dollar rallies limited.
Economic data released on Wednesday revealed a larger-than-expected increase in US Durable Goods Orders and a decline in weekly Initial Jobless Claims, but that did not alter the view that the US central bank will cut rates by 25 basis points after their December meeting.
Beyond that, rumours that White House National Economic Council Director Kevin Hassett – an open dove – will replace Jerome Powell as Fed Chair after the end of his term in May, cement hopes that the bank will cut rates at least two or three more times in 2026.
Trading volumes are expected to remain subdued on Thursday, with US markets closed for the Thanksgiving bank holiday.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.14% | 0.18% | -0.05% | 0.01% | -0.11% | -0.37% | 0.15% | |
| EUR | -0.14% | 0.04% | -0.18% | -0.13% | -0.24% | -0.51% | 0.00% | |
| GBP | -0.18% | -0.04% | -0.23% | -0.17% | -0.28% | -0.55% | -0.03% | |
| JPY | 0.05% | 0.18% | 0.23% | 0.03% | -0.07% | -0.36% | 0.19% | |
| CAD | -0.01% | 0.13% | 0.17% | -0.03% | -0.10% | -0.36% | 0.14% | |
| AUD | 0.11% | 0.24% | 0.28% | 0.07% | 0.10% | -0.27% | 0.25% | |
| NZD | 0.37% | 0.51% | 0.55% | 0.36% | 0.36% | 0.27% | 0.52% | |
| CHF | -0.15% | -0.01% | 0.03% | -0.19% | -0.14% | -0.25% | -0.52% |
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).
Monetary policy divergence keeps weighing on the US Dollar rallies
- While most of the world's major central banks are at the end of their easing cycles, the Fed is widely expected to cut interest rates by at least a full point in the next 12 months. Unless this context changes radically, prospects of a lower yield are likely to weigh heavily on speculative demand for the US Dollar.
- The minutes of the latest ECB monetary policy meeting reinforced the view that the bank has reached the end of its easing cycle, although the bank remains open to react to incoming data.
- The European Commission confirmed earlier on Thursday that the Consumer Confidence remained at -14.2 in November, unchanged from the previous month. Industrial Confidence deteriorated further, to a reading of -9.3 from -8.5 in the previous month, while the Services Sentiment improved to 5.7 in November, from 4.2 in October.
- Earlier in the day, December's German GfK Consumer Confidence Survey showed a moderate improvement to -23.2, from -24.1 in November. The impact on the Euro, however, has been marginal.
- On Wednesday, US Durable Goods Orders data showed a 0.5% growth in September, following an upwardly revised 3% growth in August, and beating expectations of a 0.3% increase. Excluding transportation, orders for all other products grew 0.6%, higher than the 0.2% market consensus.
- Apart from that, weekly US Initial Jobless Claims declined to a seven-month low of 216,000 in the week of November 22, from 222,000 in the previous week, against expectations of a moderate increase to 225,000 claims.
- Later in the day, the ECB will release the minutes of its October 30 monetary policy meeting, when the central bank's committee agreed to keep its benchmark interest rate unchanged at the 2.0% level.
Technical Analysis: EUR/USD met resistance above 1.1600
The EUR/USD pair is on a bullish trend from the 1.1500 area, but the top of the descending channel from early October highs, now around 1.1620, is likely to pose a significant resistance for Euro bulls.
Technical indicators are positive, the 4-hour Relative Strength Index (RSI) is trading near the 60 level, and the Moving Average Convergence Divergence (MACD) keeps trending higher above the zero line. Bulls, however, will have to breach trendline resistance above the mentioned 1.1620 to confirm a trend shift and aim towards the October 28 and 29 highs, near 1.1670, and the October 17 high, near 1.1730.
On the downside, immediate support is at the previous resistance level of 1.1550 (around November 21 and 24 highs). Further down, the 1.1500 psychological level and the November 5 lows, near 1.1470, will provide support before the channel bottom, now around 1.1420.
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.