Forex News
- The Euro shows mild gains against the US Dollar but remains close to the 1.1500 support area.
- Dovish comments by Fed Williams weighed on the US Dollar on Friday.
- German IFO Business Climate and ECB's Lagarde will drive the Euro on Monday.
EUR/USD shows marginal gains at Monday's European session opening, trading at 1.1520 area at the time of writing, after bouncing from two-week lows at 1.1490 on Friday. The pair edged higher in dozy Asian markets, with Japan closed for bank holidays, and with US markets bracing for a shortened Thanksgiving week.
The US Dollar (USD) was hit on Friday's US session from dovish comments by the New York Federal Reserve (Fed) President, John Williams, who raised hopes of further interest rate cuts in the coming months, and sent the US Dollar Index (DXY) down from multi-week highs.
Regarding macroeconomic data, the US preliminary S&P Global Purchasing Managers' Index (PMI) and the Michigan Consumer Sentiment Index showed fairly positive readings for November, in contrast with the Eurozone PMIs, which revealed that manufacturing activity contracted against expectations.
In the Eurozone economic calendar on Monday, the German IFO and European Central Bank (ECB) President Christine Lagarde will be the main focus, while in the US, the only event worth mentioning is the Dallas Fed Manufacturing Index
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.00% | 0.09% | 0.24% | 0.07% | -0.06% | 0.19% | 0.15% | |
| EUR | 0.00% | 0.10% | 0.23% | 0.07% | -0.06% | 0.19% | 0.15% | |
| GBP | -0.09% | -0.10% | 0.14% | -0.03% | -0.15% | 0.09% | 0.06% | |
| JPY | -0.24% | -0.23% | -0.14% | -0.16% | -0.29% | -0.04% | -0.07% | |
| CAD | -0.07% | -0.07% | 0.03% | 0.16% | -0.12% | 0.13% | 0.08% | |
| AUD | 0.06% | 0.06% | 0.15% | 0.29% | 0.12% | 0.25% | 0.21% | |
| NZD | -0.19% | -0.19% | -0.09% | 0.04% | -0.13% | -0.25% | -0.03% | |
| CHF | -0.15% | -0.15% | -0.06% | 0.07% | -0.08% | -0.21% | 0.03% |
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).
Daily digest market movers: Downbeat Eurozone data weighs on the Euro
- The Euro (EUR) remains on the back foot following weak business activity data for November. The Eurozone preliminary HCOB PMIs showed on Friday that the manufacturing sector contracted again, to 49.7 from the previous month's 50 level, compared to expectations of an improvement to 50.2. The Services PMI ticked up to 53.1 from 53.0 in the previous month, but the Compòsite Index eased to 52.4 from 52.5 in October.
- Likewise, German Manufacturing activity contracted further in November, with the preliminary HCOB Manufacturing PMI declining to 48.4 from October's 49.6, while services activity eased to 52.7 from 54.6, well below market expectations of a 53.9 reading, highlighting the soft momentum of the region's leading economy.
- In the US, the S&P Global preliminary Manufacturing PMI slowed down to 51.9 in November from 52.5 in October, below the 52.0 expected, but Services PMI beat expectations with a 55.0 reading against the market consensus of a steady 54.8 reading. The composite Index rose to 54.8 from 54.6.
- Furthermore, the US Michigan Consumer Sentiment Index improved to 51 in November, from 50.3 in October, exceeding the market consensus of a 50.5 reading. The index measuring the economic expectations also rose, to 51 from 49 in the previous month.
- The impact of the positive macroeconomic figures was offset by Fed William's comments hinting at the possibility of further monetary easing "in the near term" as, in his opinion, the bank has margin to cut interest rates further without risking its inflation goal.
- In the European session on Monday, the main attraction will be the German IFO Business Climate Index, which is expected to show a marginal improvement to 88.5 from the previous month's 88.4.
- Later on the day, European Central Bank President Christine Lagarde is expected to speak about Artificial Intelligence and Education at a forum in Bratislava, Slovakia.
Technical Analysis: EUR/USD remains bearish, with 1.1550 limiting gains
The EUR/USD shows a frail recovery attempt with its broader bearish trend fully in play. The 4-hour Relative Strength Index (RSI) remains depressed below 40, and the Moving Average Convergence Divergence (MACD) indicator has crossed the signal line below the zero level, which suggests that bullish attempts will be short-lived.
Daily highs are at 1.1530, but the immediate resistance is at the 1.1550 area, which held bulls on Thursday and Friday. The pair should break that level to confirm a bullish reaction and aim for the November 18 and 19 highs near 1.1600 and to the top of a descending channel from the mid-October highs, which is now around 1.1625.
On the downside, the 1.1500 psychological level remains at a dangerously short distance. Further down, the next targets would be the November 5 lows, near 1.1470, and the mentioned channel support, around 1.1425
Economic Indicator
IFO – Business Climate
This German business sentiment index released by the CESifo Group is closely watched as an early indicator of current conditions and business expectations in Germany. The Institute surveys more than 7,000 enterprises on their assessment of the business situation and their short-term planning. The positive economic growth anticipates bullish movements for the EUR, while a low reading is seen as negative (or bearish).
Read more.Next release: Mon Nov 24, 2025 09:00
Frequency: Monthly
Consensus: 88.5
Previous: 88.4
Source: IFO Institute
Economic Indicator
IFO – Expectations
The IFO Expectations released by the CESifo Group is closely watched as an early indicator of current conditions and business expectations for the next six months, where firms rate the future outlook as better, same, or worse. An optimistic view of those 7,000 business leaders and senior managers is considered as positive, or bullish for the EUR, whereas a pessimistic view is considered as negative, or bearish.
Review Alex Nekritin's Article - Trading Euro with IFO Report
Next release: Mon Nov 24, 2025 09:00
Frequency: Monthly
Consensus: -
Previous: 91.6
Source: IFO Institute
- NZD/USD struggles as traders expect the RBNZ to deliver a 25-basis-point rate cut in November.
- The CME FedWatch Tool suggests pricing in a 71% chance of a 25-basis-point Fed rate cut in December.
- Fed’s Williams said that policymakers could still cut rates in the “near term.”
NZD/USD loses ground after registering modest gains in the previous session, trading around 0.5610 during the European hours on Monday. The pair depreciates as the New Zealand Dollar struggles on dovish sentiment surrounding the Reserve Bank of New Zealand (RBNZ) policy outlook. Traders expect the RBNZ to deliver a 25-basis-point rate cut at the November meeting on Wednesday.
Markets are also assigning a small probability to another surprise 50 bps move, similar to the October decision, given the backdrop of elevated unemployment and a sluggish economy. However, traders will be focused on the central bank’s guidance following the decision.
However, the downside of the NZD/USD pair could be restrained as the US Dollar (USD) struggles amid renewed expectations of a Fed rate cut in December. The CME FedWatch Tool suggests that markets are now pricing in a 71% chance that the Fed will cut its benchmark overnight borrowing rate by 25 basis points (bps) at its December meeting, up from 42% probability that markets priced a week ago.
New York Fed President John Williams said on Friday that policymakers could still cut rates in the “near-term,” a remark that lifted market odds for a December move. Moreover, Fed Governor Stephen Miran said that Nonfarm Payrolls data supports a December rate cut, adding that if his vote were decisive, he “would vote for a 25 bps cut.” However, Boston Fed President Susan Collins said she has not yet made up her mind on a potential move.
New Zealand Dollar Price Today
The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the weakest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.12% | -0.01% | 0.22% | 0.05% | -0.10% | 0.01% | 0.06% | |
| EUR | 0.12% | 0.11% | 0.34% | 0.17% | 0.02% | 0.13% | 0.19% | |
| GBP | 0.01% | -0.11% | 0.25% | 0.06% | -0.09% | 0.00% | 0.07% | |
| JPY | -0.22% | -0.34% | -0.25% | -0.15% | -0.31% | -0.20% | -0.13% | |
| CAD | -0.05% | -0.17% | -0.06% | 0.15% | -0.15% | -0.04% | 0.01% | |
| AUD | 0.10% | -0.02% | 0.09% | 0.31% | 0.15% | 0.11% | 0.17% | |
| NZD | -0.01% | -0.13% | -0.01% | 0.20% | 0.04% | -0.11% | 0.07% | |
| CHF | -0.06% | -0.19% | -0.07% | 0.13% | -0.01% | -0.17% | -0.07% |
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 New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).
- The New Zealand Dollar treads water near the 0.5600 line against the USD on Monday.
- Hopes of an RBNZ cut on Wednesday are weighing on the Kiwi.
- Technical indicators suggest that the bearish trend night be losing momentum.
The New Zealand Dollar is struggling to find acceptance above 0.5600 on Monday, after bouncing from multi-month lows at 0.5570. The pair maintains its broader bearish trend intact, amid hopes of further RBNZ easing later this week. Still, the technical picture seems to be giving the first signs of exhaustion after having depreciated about 9% in less than four months.
The pair, however, is unlikely to post any significant recovery ahead of New Zealand’s central bank decision, due on Wednesday. The market has priced in a quarter-point rate cut, and the focus will be on the monetary policy statement to assess the chances of further easing next year.
Technical Analysis: Potential end wedge pattern in the daily chart
A look at the daily chart shows an ending wedge pattern, a figure often seen at the end of trading cycles, suggesting that the balance of forces between bulls and bears is rebalancing, in this case, suggesting that the bearish momentum might be losing steam.
With that in mind, the pair is not giving clear signs to confirm a trend shift, although the bullish divergence in the daily Relative Strength Index should act as a warning for sellers. The Moving Average Convergence Divergence (MACD) remains marginally below zero, although it is turning flat, which suggests that bearish momentum is weak.
The descending trend line from the 0.6000 area continues to cap rebounds, with resistance seen around 0.5649. Immediate hurdles emerge at the November 14 and 17 highs near 0.5690 and the 0.5800 area (October 28 highs. Failure to reclaim these barriers would preserve the bearish bias.
Immediate support is at Friday´s low of 0.5580 and the wedge bottom, now around 0.5575. Further down, the 0.5500 psychological level, and April's low of 0.5485 would come into focus.
(The technical analysis of this story was written with the help of an AI tool).
RBNZ FAQs
The Reserve Bank of New Zealand (RBNZ) is the country’s central bank. Its economic objectives are achieving and maintaining price stability – achieved when inflation, measured by the Consumer Price Index (CPI), falls within the band of between 1% and 3% – and supporting maximum sustainable employment.
The Reserve Bank of New Zealand’s (RBNZ) Monetary Policy Committee (MPC) decides the appropriate level of the Official Cash Rate (OCR) according to its objectives. When inflation is above target, the bank will attempt to tame it by raising its key OCR, making it more expensive for households and businesses to borrow money and thus cooling the economy. Higher interest rates are generally positive for the New Zealand Dollar (NZD) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken NZD.
Employment is important for the Reserve Bank of New Zealand (RBNZ) because a tight labor market can fuel inflation. The RBNZ’s goal of “maximum sustainable employment” is defined as the highest use of labor resources that can be sustained over time without creating an acceleration in inflation. “When employment is at its maximum sustainable level, there will be low and stable inflation. However, if employment is above the maximum sustainable level for too long, it will eventually cause prices to rise more and more quickly, requiring the MPC to raise interest rates to keep inflation under control,” the bank says.
In extreme situations, the Reserve Bank of New Zealand (RBNZ) can enact a monetary policy tool called Quantitative Easing. QE is the process by which the RBNZ prints local currency and uses it to buy assets – usually government or corporate bonds – from banks and other financial institutions with the aim to increase the domestic money supply and spur economic activity. QE usually results in a weaker New Zealand Dollar (NZD). QE is a last resort when simply lowering interest rates is unlikely to achieve the objectives of the central bank. The RBNZ used it during the Covid-19 pandemic.
- USD/CAD may approach the seven-month high of 1.4140.
- The 14-day Relative Strength Index is positioned at 59.9, reinforcing the bullish momentum.
- The primary support lies at the nine-day EMA of 1.4062.
USD/CAD recovers its recent losses from the previous session, trading around 1.4100 during the early European hours on Monday. The daily chart’s technical setup reflects a persistent bullish bias, with the pair remaining within its ascending channel pattern. The 14-day Relative Strength Index (RSI) trends higher near 59.9, staying above the midline, confirming bullish momentum.
The USD/CAD pair holds above a rising nine-day Exponential Moving Average (EMA) at 1.4063 and the 50-day EMA at 1.3982, keeping the short-term bias pointed higher. The nine-day EMA continues to track above the 50-day EMA, reinforcing topside pressure.
The USD/CAD pair may test the seven-month high of 1.4140, reached on November 5, followed by the crucial level of .4150. Further advances above this level would lead the pair to test the upper boundary of the ascending channel at 1.4210.
On the downside, the initial support appears at the nine-day EMA of 1.4062. A break below this level would weaken the short-term price momentum and prompt the USD/CAD pair to test the ascending channel’s lower boundary around the psychological level of 1.4000, followed by the 50-day EMA at 1.3982.
Canadian Dollar Price Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the weakest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.02% | 0.10% | 0.28% | 0.07% | -0.05% | 0.15% | 0.21% | |
| EUR | -0.02% | 0.09% | 0.29% | 0.05% | -0.08% | 0.13% | 0.18% | |
| GBP | -0.10% | -0.09% | 0.18% | -0.03% | -0.16% | 0.06% | 0.09% | |
| JPY | -0.28% | -0.29% | -0.18% | -0.20% | -0.33% | -0.13% | -0.06% | |
| CAD | -0.07% | -0.05% | 0.03% | 0.20% | -0.12% | 0.07% | 0.13% | |
| AUD | 0.05% | 0.08% | 0.16% | 0.33% | 0.12% | 0.20% | 0.26% | |
| NZD | -0.15% | -0.13% | -0.06% | 0.13% | -0.07% | -0.20% | 0.06% | |
| CHF | -0.21% | -0.18% | -0.09% | 0.06% | -0.13% | -0.26% | -0.06% |
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 Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
(The technical analysis of this story was written with the help of an AI tool.)
- Gold drifts lower on Monday as a positive risk tone continues to undermine safe-haven demand.
- The USD consolidates below a multi-month high set last week mixed signals from Fed officials.
- Geopolitical risks could lend support to the XAU/USD pair ahead of this week's US macro data.
Gold (XAU/USD) maintains its offered tone through the early European session on Monday, though it lacks follow-through and currently trades just above the $4,050 level, down 0.35% for the day. The recent mixed signals from US Federal Reserve (Fed) officials keep the door open for another interest rate cut in December, which, in turn, fail to assist the US Dollar (USD) to build on its recent gains. Apart from this, persistent geopolitical uncertainties stemming from the intensifying Russia-Ukraine war and fresh conflicts in the Middle East turn out to be key factors underpinning the safe-haven commodity.
Traders also seem reluctant and opt to wait for this week's important US macro releases – including the Q3 GDP print and the Personal Consumption Expenditure (PCE) Price Index – before placing fresh directional bets around the Gold price. In the meantime, the USD is seen holding steady just below its highest level since late May touched last week. This, along with a generally positive tone around the equity markets, continues to exert some downward pressure on the Gold price. This, in turn, warrants some caution for the XAU/USD bulls and positioning for any meaningful recovery.
Daily Digest Market Movers: Gold remains depressed as USD bulls shrug off reviving Fed rate cut bets
- New York Federal Reserve President John Williams described the current policy as modestly restrictive and told reporters on Friday that he sees room for the central bank to lower rates in the near term. Traders were quick to react and are now pricing in around a 67% chance that the Fed will lower borrowing costs in December.
- However, other Fed officials maintained a hawkish stance, with Dallas Fed President Lorie Logan calling for leaving the policy rate on hold for the time being. This assists the US Dollar in preserving its recent gains to the highest level since late May and exerts some downward pressure on the Gold during the Asian session on Monday.
- Meanwhile, the renewed optimism that the US central bank will cut interest rates again in December boosts investors' appetite for riskier assets. This allows most Asian stocks to rise on Monday and recover some of the recent losses, which, in turn, is seen as another factor that undermines demand for the safe-haven precious metal.
- Ukraine launched a significant drone attack on a heat and power station in Russia’s Moscow region. Russia, on the other hand, said that it had captured three more villages in eastern Ukraine. Meanwhile, US President Donald Trump has given Ukraine until November 27 to approve a 28-point peace plan to end the nearly four-year war.
- Ukraine is seeking changes to the proposal that accepts some of Russia's hardline demands and makes painful concessions in order to end the invasion. This keeps geopolitical risks in play and might continue to offer some support to the precious metal, warranting some caution before positioning for any further depreciating move.
- Traders now look forward to a rather busy US economic docket this week, featuring the delayed release of the Producer Price Index (PPI), Retail Sales, and the Conference Board's Consumer Confidence Index on Tuesday. This will be followed by the preliminary Q3 GDP and the Personal Consumption Expenditure (PCE) Price Index on Wednesday.
- The latter would offer more cues about the Fed's future rate-cut path, which, in turn, will play a key role in influencing the near-term USD price dynamics and provide some meaningful impetus to the non-yielding yellow metal.
Gold bears await a sustained break below the $4,030 confluence support before placing fresh bets
From a technical perspective, the XAU/USD pair, so far, has managed to defend an upward-sloping trend-line extending from late October. The said support is currently pegged near the $4,030 region and now coincides with the 200-period Exponential Moving Average (EMA) on the 4-hour chart. This, in turn, should act as a key pivotal point, which, if broken decisively, might turn the Gold price vulnerable to weaken further below the $4,000 psychological mark and test last week's swing low, around the $3,968-3,967 area. The downward trajectory could extend further the $3,931 support en route to the $3,900 mark and late October swing low, around the $3,886 region.
On the flip side, the $4,080 supply zone now seems to act as an immediate hurdle ahead of the $4,100 mark. A sustained move and acceptance above the latter could lift the Gold price to the next relevant hurdle near the $4,152-4,155 region. The momentum could extend further and allow the XAU/USD pair to climb further towards reclaiming the $4,200 round figure.
US Dollar Price Last 7 Days
The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.91% | 0.52% | 1.41% | 0.55% | 1.15% | 1.38% | 1.86% | |
| EUR | -0.91% | -0.30% | 0.85% | -0.36% | 0.21% | 0.46% | 0.95% | |
| GBP | -0.52% | 0.30% | 0.90% | -0.06% | 0.51% | 0.76% | 1.25% | |
| JPY | -1.41% | -0.85% | -0.90% | -0.84% | -0.26% | -0.05% | 0.41% | |
| CAD | -0.55% | 0.36% | 0.06% | 0.84% | 0.60% | 0.82% | 1.31% | |
| AUD | -1.15% | -0.21% | -0.51% | 0.26% | -0.60% | 0.26% | 0.74% | |
| NZD | -1.38% | -0.46% | -0.76% | 0.05% | -0.82% | -0.26% | 0.48% | |
| CHF | -1.86% | -0.95% | -1.25% | -0.41% | -1.31% | -0.74% | -0.48% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Here is what you need to know on Monday, November 24:
Markets turn risk-positive to start the week as investors reassess the odds of a Federal Reserve (Fed) rate cut in December. In the European session, business sentiment data from Germany will be watched closely by market participants. The US economic calendar will feature mid-tier data releases on Monday.
US Dollar Price Last 7 Days
The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.93% | 0.50% | 1.39% | 0.56% | 1.18% | 1.38% | 1.85% | |
| EUR | -0.93% | -0.32% | 0.85% | -0.35% | 0.24% | 0.47% | 0.94% | |
| GBP | -0.50% | 0.32% | 0.92% | -0.03% | 0.55% | 0.79% | 1.26% | |
| JPY | -1.39% | -0.85% | -0.92% | -0.81% | -0.21% | -0.02% | 0.43% | |
| CAD | -0.56% | 0.35% | 0.03% | 0.81% | 0.62% | 0.80% | 1.29% | |
| AUD | -1.18% | -0.24% | -0.55% | 0.21% | -0.62% | 0.24% | 0.70% | |
| NZD | -1.38% | -0.47% | -0.79% | 0.02% | -0.80% | -0.24% | 0.47% | |
| CHF | -1.85% | -0.94% | -1.26% | -0.43% | -1.29% | -0.70% | -0.47% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Dovish comments from Fed policymakers fed into expectations of a 25 basis points (bps) rate cut in December on Friday. According to the CME FedWatch Tool, markets are currently pricing in about a 70% probability of a rate cut, compared to less than 50% a few days earlier. Fed Governor Stephen Miran, who preferred a 50 bps rate cut in the previous two policy meetings, noted that he would vote for a 25 bps rate cut in December, if his vote were to be the deciding factor whether the Fed would lower the policy rate. Meanwhile, NY Fed President John Williams hinted that he could vote for a cut at the next meeting, saying "I view monetary policy as being modestly restrictive. Therefore, I still see room for a further adjustment in the near term."
The US Dollar (USD) Index erased its daily gains late Friday to end the day virtually unchanged. Early Monday, the USD Index fluctuates in a tight range above 100.0. In the meantime, US stock index futures were last seen rising between 0.2% and 0.7% after Wall Street's main indexes registered decisive gains heading into the weekend.
Gold kept its footing on Friday but posted marginal losses for the week. XAU/USD stays relatively quiet and moves sideways, slightly above $4,050, in the European morning on Monday.
EUR/USD holds steady above 1.1500 to start the European session after losing nearly 1% in the previous week.
GBP/USD fell about 0.6% last week before going into a consolidation phase near 1.3100 early Monday. On Wednesday, Chancellor of the Exchequer Rachel Reeves will deliver the Autumn Budget, which could influence the Bank of England's (BoE) policy outlook and Pound Sterling's valuation.
USD/JPY turned south on Friday and snapped a five-day winning streak. The pair holds its ground in the European morning and trades above 156.50.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
West Texas Intermediate (WTI) Oil price advances on Monday, early in the European session. WTI trades at $58.13 per barrel, up from Friday’s close at $57.90.
Brent Oil Exchange Rate (Brent crude) is stable, hovering around its previous daily close at $61.90.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
The German IFO Survey Overview
Germany’s IFO institute will publish its business survey for November on Monday at 09:00 GMT.
The headline IFO Business Climate Index is expected to tick higher to 88.5 this month, from a 88.4 reading in October.
The Current Assessment Index stood at 85.3 in October, while the Expectations Index came in at 91.6.
How could the German IFO Survey affect EUR/USD?
EUR/USD is likely to remain steady if the IFO Business Survey data comes out as expected. Any surprise downtick in the German business activity could put little pressure on the Euro (EUR), as it receives support from the cautious sentiment surrounding the European Central Bank’s (ECB) monetary policy outlook. The ECB is widely expected to keep rates unchanged through the end of 2026, with inflation hovering near its 2% target, stable economic growth, and unemployment at record lows.
The EUR/USD pair also holds ground as the US Dollar (USD) faces challenges amid renewed expectations of a Fed rate cut in December weighs on sentiment. The CME FedWatch Tool suggests that markets are now pricing in a 71% chance that the Fed will cut its benchmark overnight borrowing rate by 25 basis points (bps) at its December meeting, up from 42% probability that markets priced a week ago.
Technically, the EUR/USD trades higher around 1.1520 at the time of writing. The 14-day Relative Strength Index (RSI) remains below the 50 level, strengthening the bearish bias. The pair may find its initial support at the psychological level of 1.1500, followed by the three-month low of 1.1468. On the upside, the immediate barrier lies at the nine-day EMA of 1.1548, followed by the psychological level of 1.1600 and the 50-day EMA at 1.1605.
German economy FAQs
The German economy has a significant impact on the Euro due to its status as the largest economy within the Eurozone. Germany's economic performance, its GDP, employment, and inflation, can greatly influence the overall stability and confidence in the Euro. As Germany's economy strengthens, it can bolster the Euro's value, while the opposite is true if it weakens. Overall, the German economy plays a crucial role in shaping the Euro's strength and perception in global markets.
Germany is the largest economy in the Eurozone and therefore an influential actor in the region. During the Eurozone sovereign debt crisis in 2009-12, Germany was pivotal in setting up various stability funds to bail out debtor countries. It took a leadership role in the implementation of the 'Fiscal Compact' following the crisis – a set of more stringent rules to manage member states’ finances and punish ‘debt sinners’. Germany spearheaded a culture of ‘Financial Stability’ and the German economic model has been widely used as a blueprint for economic growth by fellow Eurozone members.
Bunds are bonds issued by the German government. Like all bonds they pay holders a regular interest payment, or coupon, followed by the full value of the loan, or principal, at maturity. Because Germany has the largest economy in the Eurozone, Bunds are used as a benchmark for other European government bonds. Long-term Bunds are viewed as a solid, risk-free investment as they are backed by the full faith and credit of the German nation. For this reason they are treated as a safe-haven by investors – gaining in value in times of crisis, whilst falling during periods of prosperity.
German Bund Yields measure the annual return an investor can expect from holding German government bonds, or Bunds. Like other bonds, Bunds pay holders interest at regular intervals, called the ‘coupon’, followed by the full value of the bond at maturity. Whilst the coupon is fixed, the Yield varies as it takes into account changes in the bond's price, and it is therefore considered a more accurate reflection of return. A decline in the bund's price raises the coupon as a percentage of the loan, resulting in a higher Yield and vice versa for a rise. This explains why Bund Yields move inversely to prices.
The Bundesbank is the central bank of Germany. It plays a key role in implementing monetary policy within Germany, and central banks in the region more broadly. Its goal is price stability, or keeping inflation low and predictable. It is responsible for ensuring the smooth operation of payment systems in Germany and participates in the oversight of financial institutions. The Bundesbank has a reputation for being conservative, prioritizing the fight against inflation over economic growth. It has been influential in the setup and policy of the European Central Bank (ECB).
- EUR/GBP gains ground to around 0.8790 in Monday’s early European session.
- UK Retail Sales unexpectedly fell by 1.1% MoM in October, boosting BoE rate cut bets.
- The ECB is widely anticipated to end its rate-cutting cycle by the end of this year.
The EUR/GBP cross trades with mild gains near 0.8790 during the early European trading hours on Monday. A softer-than-expected UK Retail Sales report for October weighs on the Pound Sterling (GBP) against the Euro (EUR). Germany’s November IFO Business Survey data will be published later on Monday.
Data from the Office for National Statistics showed on Friday that the UK Retail Sales declined for the first time in five months in October, falling 1.1% month-over-month in October, compared to a rise of 0.7% in September (revised from 0.5%). This figure came in weaker than the expectation of 0% in the reported month.
The poor UK Retail Sales report, combined with slower Purchasing Managers Index (PMI) growth and disappointing Gross Domestic Product (GDP), increased expectations of a potential interest rate cut by the Bank of England (BoE), exerting some selling pressure on the Pound Sterling.
The UK government's Autumn Budget is scheduled for Wednesday and is likely to influence the decision to wait, as the BoE awaits more clarity on its potential impact on the economy. Chancellor of the Exchequer Rachel Reeves is expected to raise income taxes on households to fill the £22 billion shortfall in the government's finances.
The European Central Bank (ECB) seems to be nearing the end of its rate-cutting cycle, with most analysts expecting no rate change at the December meeting and only a slim chance of a further quarter-percentage-point reduction in 2026. This is consistent with the ECB’s message that inflation is contained. Eurozone inflation hovered at 2.1% in October, and underlying measures remain consistent with the ECB’s medium-term 2% target.
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.
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