EUR/USD Slightly Rises Amid Varied Economic Indicators
EUR/USD edged up a bit after a decline of nearly 0.5% in the previous session, hovering around 1.1570 during Asian trading hours on Tuesday. The pair is poised to benefit from the upcoming release of September’s Harmonized Consumer Price Index (HICP) and Germany’s ZEW survey data.
Recently, the euro (EUR) faced some pressure, largely due to ongoing political uncertainty in France. President Emmanuel Macron’s reappointment of Sébastien Lecorne as prime minister and the formation of a new cabinet hasn’t eased the situation. In fact, opposition leaders Marine Le Pen and Eric Ciotti have already initiated a no-confidence motion aimed at ousting Lecorne.
On the other hand, the currency pair is receiving some support since the U.S. dollar (USD) appears to be weakening. The Federal Reserve seems likely to cut rates further before the year concludes. Current market dynamics suggest there’s almost a 97% probability of a rate cut in October and a 92% chance of another reduction in December—at least according to the CME FedWatch tool.
Philadelphia Fed President Anna Paulson noted on Monday that the increasing risks to the job market may justify more rate cuts, as trade tariffs probably won’t drive inflation as much as anticipated.
The dollar also seems to be struggling as traders remain cautious in light of the ongoing U.S. government shutdown. This situation is likely to impact the overall economy significantly. Recent unpaid salaries and the halting of numerous government services will likely have broader repercussions, affecting more than just federal workers.
