EUR/USD Surges on Eurozone Economic Strength

The EUR/USD pair rallied to a two-week high of 1.0890, fueled by a robust Eurozone economy and persistent inflationary pressures.

Key Factors Driving the Rally:

Eurozone GDP Growth: The Eurozone economy expanded at a faster-than-expected pace of 0.9% in the third quarter, with Germany avoiding a technical recession.

Hotter-Than-Forecasted Inflation: Eurozone inflation accelerated to 2% year-over-year, exceeding expectations and signaling that the battle against price pressures continues.
ECB’s Cautious Stance: While ECB President Christine Lagarde reaffirmed her commitment to interest rate cuts, she expressed confidence in taming inflation.

Impact on the US Dollar:

The US Dollar’s trajectory will be influenced by several key factors, including the upcoming US presidential election, Non-Farm Payroll (NFP) data, and the ISM Manufacturing PMI.

Outlook for EUR/USD:

The strong Eurozone economic data has dampened expectations for aggressive interest rate cuts by the ECB. This, coupled with persistent inflation, could lead to further upside potential for the EUR/USD pair. However, the pair’s future direction will also depend on the evolving global economic landscape and US monetary policy decisions.