Euro Hits Two-Week Lows Against the Dollar

The Euro continues its decline against the US Dollar for nearly two weeks, trading near the 1.1500 level. This downturn accelerated after the release of the Federal Reserve (Fed) meeting minutes with a non-dovish tone, significantly reducing expectations for a rate cut in December.

Fed Minutes Shake Rate Cut Expectations

The October Federal Open Market Committee (FOMC) meeting minutes, released on Wednesday, revealed that many Fed officials are opposed to a rate cut. Officials expressed concerns that cutting rates could weaken the fight against inflation and undermine confidence in the central bank. This development has sharply lowered expectations for consecutive rate cuts in December.

According to CME Group’s FedWatch Tool, the probability of a 25-basis-point rate cut at the December 10 meeting dropped from 50% to below 30% on Wednesday. Just a month ago, this probability stood above 90%. These developments have fueled strength in the US Dollar.

Construction Sector Contracts Further in the Eurozone

September Construction Output data for the Eurozone showed an accelerated contraction in the sector. This negative data weighed on the Euro, while the European Commission’s preliminary November Consumer Confidence Index, due later today, may provide additional clues about the currency’s direction.

US Jobless Claims and Manufacturing Surveys in Focus

On the US side, market participants are focused on the September Nonfarm Payrolls report. The report is expected to show a net employment gain of 55,000. Additionally, the Philadelphia Fed Manufacturing Index will offer important signals about economic activity.

EUR/USD Falls for the Fifth Consecutive Day

After climbing toward the 1.1600 level on Wednesday, the EUR/USD pair experienced a sharp pullback and is trading around 1.1515 as of Thursday morning. This marks the pair’s fifth consecutive day of losses. The US Dollar’s strength following the Fed minutes and investors’ cautious stance ahead of the September employment data have contributed to the Euro’s depreciation.

Euro’s Performance Against Other Major Currencies

Today, the Euro posted its strongest performance against the Japanese Yen while losing ground against the US Dollar. Changes against other major currencies were as follows:

  • USD/EUR: -0.08%
  • EUR/JPY: +0.33%
  • EUR/GBP: -0.19%
  • EUR/CAD: -0.23%
  • EUR/AUD: -0.38%
  • EUR/NZD: +0.08%
  • EUR/CHF: -0.05%

Market Outlook for the Coming Days

Movements between the Euro and the US Dollar will be shaped in the coming days by upcoming economic data releases. Consumer confidence in the Eurozone and employment figures in the US will be decisive for the direction of these currencies. Ongoing uncertainty regarding the Fed’s interest rate policy will continue to influence the Dollar’s overall performance.