The Euro Starts to Rise, Why the Dollar Suddenly Weakens?
The EUR/USD strengthened slightly around 1.1540 during the Asian session on Friday, after remaining stagnant the previous day. The market is still awaiting the release of preliminary German and Eurozone PMI data for November, before focusing on the US S&P Global PMI data in the North American session. This movement suggests the euro is starting to catch some steam, although sentiment remains cautious.
The euro's strengthening occurred as the US dollar weakened after a five-day rally. The September US jobs data actually raised expectations that the Fed could cut interest rates in December. Nonfarm payrolls increased by 119,000, well above expectations of 50,000, but the unemployment rate rose slightly to 4.4% and annual wage growth remained at 3.8%. According to CME FedWatch, the probability of a 25 bps interest rate cut in December has now risen to around 36% from 30% the day before, easing pressure on the dollar slightly.
From the European side, the euro remains supported by the view that the ECB's monetary policy will not change significantly in the near future. With inflation close to its 2% target, relatively stable growth, and record-low unemployment, the ECB is widely expected to keep interest rates on hold until the end of 2026. ECB Council member and Governor of the Bank of Ireland, Gabriel Makhlouf, emphasized that the current policy is appropriate and will only be changed if conditions change significantly. (az)
Source: Newsmaker.id
