EUR/USD has failed to return beyond 1.1600 on Tuesday but remains trading right above Monday’s low, at 1.1585 at the time of writing. Investors remain cautious about placing US Dollar (USD) directional bets, ahead of a backlog of US economic reports due later this week.
US data released on Monday beat expectations, with the New York manufacturing Index improving to the highest level in nearly one year in November, and construction spending, the first of a large array of delayed data releases, increasing against expectations in August.
However, Federal Reserve (Fed) Governor Christopher Waller warned that the adoption of Artificial Intelligence (AI) technology will weaken demand for employment by US businesses and that the central bank will have to be ready to respond by cutting interest rates.
All in all, hopes of a Fed rate cut in December remain steady below 50% with investors awaiting more economic data. The European calendar is practically void on Tuesday, but in the US, the ADP weekly employment report and Factory Orders data will give some fundamental background for the US Dollar. The highlight of the week, however, will be September’s Nonfarm Payrolls report, due on Thursday.
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% | 0.03% | 0.02% | -0.10% | -0.05% | -0.15% | -0.02% | |
| EUR | 0.00% | 0.02% | 0.04% | -0.09% | -0.05% | -0.15% | 0.01% | |
| GBP | -0.03% | -0.02% | 0.00% | -0.13% | -0.08% | -0.17% | -0.04% | |
| JPY | -0.02% | -0.04% | 0.00% | -0.12% | -0.06% | -0.18% | -0.03% | |
| CAD | 0.10% | 0.09% | 0.13% | 0.12% | 0.05% | -0.06% | 0.11% | |
| AUD | 0.05% | 0.05% | 0.08% | 0.06% | -0.05% | -0.10% | 0.04% | |
| NZD | 0.15% | 0.15% | 0.17% | 0.18% | 0.06% | 0.10% | 0.14% | |
| CHF | 0.02% | -0.01% | 0.04% | 0.03% | -0.11% | -0.04% | -0.14% |
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: Currencies waver within range amid cautious markets
- The Euro (EUR) recovers some of the previous losses but remains trading within a narrow range. Traders await more US data for a clearer picture of the US economy and the Fed’s monetary easing prospects.
- On Monday, the New York Empire State Manufacturing Index beat expectations with an increase to 18.7 in November, from October’s10.7 reading and against market expectations of a deterioration to 6.0
- In the same line, Construction Spending rose 0.2% in August, according to a delayed release from the US Census Bureau, beating expectations of a 0.1% decline. Apart from that, July’s reading was revised up to a 0.2% gain from the 0.1% contraction previously reported.
- August’s factory orders are expected to bounce to a 1.4% increase, compared to the 1.3% decline seen in July, the last release before the US government shutdown.
- Apart from that, speeches from Federal Reserve Governor Michael Barr and Richmond Fed President Thomas Barkin might give some more clues about the outcome of December’s meeting.
Technical Analysis: EUR/USD remains on the defensive near 1.1600
EUR/USD remains on the defensive amid the cautious market mood. Bulls have failed to return above the 1.1600 level, with the 4-hour Relative Strength Index (RSI) indicator capped below the 50 level, and the Moving Average Convergence Divergence (MACD) trending lower, which highlights the pair’s bearish momentum.
The pair is retreating back from a trendline resistance, with Monday’s low at 1.1585 still at a short distance. Further down, the November 7, 10, and 11 lows in the 1.1535-1.1545 area, and the November 5 lows, near 1.1470, emerge as the next bearish targets.
To the upside, a previous support area around 1.1610 is holding bulls ahead of the top of the bearish channel, which now lies at the 1.1635 area. Above, the October 28 and 29 highs around 1.1670 would come into focus.
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.