EUR/USD Continues to Climb, Is the US Dollar Starting to Exhaust?
The EUR/USD pair continued to strengthen, approaching the 1.1615 area in the Asian session due to a weakening US dollar. The main reason was the US Manufacturing PMI data falling to 48.2, remaining in contraction for the ninth consecutive month. This figure was worse than expected, increasing market confidence that the Fed will cut interest rates at its December 9-10 meeting. The probability of a rate cut is now approaching 87%, up significantly from around 71% last week, increasing pressure on the dollar.
On the other hand, the euro is gaining support from the view that the ECB may have finished cutting interest rates. Christine Lagarde's comments that borrowing costs are at the right level, and Nagel's apparent comfort with current policy, have led the market to view ECB policy as likely stable. However, the upcoming release of preliminary Eurozone inflation (CPI) data remains a risk: if inflation falls lower than expected, the euro could be weighed down again as markets begin to speculate about further policy easing from the ECB. (az)
Source: Newsmaker.id
