EURUSD Fundamental Analysis
Bloomberg—The euro moved closer to $1.16 on Tuesday, reaching its highest level since November 18. This happened as traders shifted away from the US dollar after new economic data from the United States came in weaker than expected.
US retail sales grew less than forecast in September, and ADP numbers showed rising job losses in the four weeks ending November 8. Producer prices increased by 0.3% from the previous month, matching expectations.
Because of this soft data, along with cautious remarks from several Federal Reserve officials, markets now expect the Fed to make a third rate cut in December.
At the same time, the European Central Bank is likely to keep interest rates steady through 2026. Policymakers say the region’s economy remains stable and inflation is close to target. Even so, some concerns remain, especially around high prices for groceries and services. ECB member Joachim Nagel also stressed the need to stay watchful.