Euro/US Dollar (EUR/USD) Pair Rises Amidst US Economic Data Release
- EUR/USD gains as the US Dollar weakens ahead of key economic data announcements.
- Optimism surrounding fiscal discipline in the US keeps the Dollar under pressure.
- ECB warns of price pressures remaining below target, impacting Eurozone outlook.
US Economic Data Overview
In Wednesday’s North American session, the EUR/USD pair reached a weekly high near 1.0560. The US Dollar continued its decline following the release of various economic indicators:
- US Q3 GDP growth stands at 2.8%, meeting initial estimates.
- Durable Goods Orders for October show a slower growth rate of 0.2% compared to expectations of 0.5%.
- Initial Jobless Claims for the week ending November 22 are lower than anticipated at 213K.
US Dollar Index and Market Sentiment
The US Dollar Index (DXY) hit a weekly low near 106.00 after a correction phase from its recent two-year high. This correction was triggered by statements from hedge fund manager Scott Bessent, nominated for Treasury Secretary, regarding gradual tariff implementation and budget deficit reduction.
Investors are closely watching the US Personal Consumption Expenditure Price Index (PCE) data for October, a key factor for Federal Reserve policy decisions. Expectations are for an increase in headline and core inflation rates, influencing the Fed’s interest rate decision for December.
Market Movers: Eurozone Concerns and ECB Actions
- The Euro’s rise against the Dollar is tempered by Eurozone economic growth risks.
- ECB policymakers express caution over economic growth and inflation undershooting targets, leading to rate cut expectations.
- Market analysts predict a 37bp ECB rate cut in December to stimulate the Eurozone economy.
Upcoming Events and Technical Analysis
Investors await the Eurozone’s Harmonized Index of Consumer Prices (HICP) data for guidance on the interest rate path. Technical analysis of EUR/USD shows a bullish trend above 1.0550 but with bearish indicators in the daily chart.
Key Levels: Support at 1.0330 and resistance at 1.0600.
Economic Indicator Spotlight: Core Personal Consumption Expenditures (PCE)
The Core PCE Price Index, released by the US Bureau of Economic Analysis, is a crucial measure of inflation for the Fed. Market participants closely monitor this indicator for insights into US economic health and potential policy changes.
Stay tuned for the latest updates on economic data and market trends to make informed investment decisions.