EUR/USD retreats on mixed EU data, ahead of Fed’s decision

The EUR/USD pair is presently trading below 1.0600, having retreated from a weekly high of 1.0675. The Eurozone released mixed economic data in October, with GDP declining by 0.1% in Q3 but inflation falling to 2.9% in the same month.

ECB officials maintain that more tightening is possible, with Joachim Nagel highlighting the necessity of maintaining high rates for an extended length of time.

The EUR/USD pair retreats from a weekly high at 1.0675 reached during the European session and dives below the 1.0600 figure courtesy of mixed economic data from the Eurozone and overall US Dollar strength. At the time of writing, is trading at 1.0580, down 0.31%.

In the face of conflicting economic signals from the Eurozone, the Euro loses ground to the US Dollar. Risk appetite has increased throughout the North American session as a result of Wall Street printing gains. According to the Conference Board (CB), consumer confidence declined in the US. The numbers were 102.6, up from 104.3 in September and higher than the predicted 100.5. Concurrently, there has been an increase in employment costs, according to the US Department of Labour. The Employment Cost Index increased 1.1% compared to 1% predictions.


The ADP Employment Change report, the S&P Global and ISM PMIs, and the Federal Reserve’s monetary policy announcement were all scheduled to be included on Wednesday’s economic docket. Although it is anticipated that the Fed will hold rates steady, another rate hike will probably be considered.

Inflation in the Eurozone fell below the 3% mark in October, registering at 2.9%. This is significantly less than the 4.3% recorded in September and is below the 3.1% forecast. The European Central Bank’s decision to hold interest rates last week was supported by this data. Money market futures are now projecting that the first rate cut may take place in the first half of 2024 as a result.

The third-quarter GDP of the Eurozone was disappointing, coming in at -0.1%, missing the forecast of 0% growth, despite the positive inflation figures. In spite of this, some ECB officials have left the door open for further tightening. “Our tight monetary policy is working, but we must not let up too soon,” said Bundesbank President Joachim Nagel. He underlined the necessity of keeping interest rates high enough for a long time.