The shared currency continues to gain traction against the Greenback on Monday, which remains battered as US Treasury bond yields continue to edge lower, a headwind for the buck. Even though the economic outlook in the Eurozone (EU) is pessimistic, the EUR/USD’s rally continues, sponsored by a soft US Dollar. At the time of writing, the EUR/USD is trading at 1.0942, with buyers targeting the 1.1000 figure, late in the week.
The US Dollar (USD) remains weak for the second consecutive trading day. The US Dollar Index (DXY), a measure that tracks the buck’s value against six currencies, dropped 0.34%, is at 103.46, and remains the primary reason for the Euro’s (EUR) strength. According to the futures market, the latest inflation report in the United States (US) has increased the odds for rate cuts by the US Federal Reserve (Fed) next year.
The calendar would feature the release of the Federal Reserve’s Open Market Committee (FOMC) last meeting minutes on Tuesday. On Wednesday, unemployment claims will be released, followed by the Chicago Fed National Activity Index and Flash PMI figures on their preliminary readings for November.
Across the pond, the EU’s docket would release November PMIs, Germany’s IFO survey, and the latest European Central Bank (ECB) meeting minutes.
On the central bank front, ECB´s member Hernandez de Cos said the current level of rates should be enough, while Wunsch stressed that bet on rate cut reduction could trigger another hike by the EU’s central bank. The Bundesbank President and ECB’s Governing Council member Joachim Nagel pushed back against rate cuts, while Holtzmann said the ECB is ready for additional tightening, “if necessary.”
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