The EUR/USD currency pair began the week somewhat sluggishly, yet it’s still hovering near its highest point since early October, which it reached last Thursday. Currently, the price is around 1.1730, showing a slight decrease of less than 0.10% for the day.
In the Asian session on Monday, the US dollar gained a bit, continuing a modest recovery from a two-month low hit last week. This slight rise is perceived as a challenge for EUR/USD, although there doesn’t seem to be any strong fundamental reason behind the dollar’s increase, suggesting it might just linger at these levels because of a dovish stance from the Federal Reserve.
Last week, the U.S. central bank indicated that further interest rate cuts might be on the horizon, following a third reduction this year. Nevertheless, as signs of a softening labor market become clearer, traders anticipate possibly two more cuts next year. If the Fed chairman aligns with President Trump’s views, attempts to strengthen the dollar could face some obstacles.
President Trump mentioned that he has narrowed down his list for Jerome Powell’s potential replacement, expressing expectations that his choice will also aim to lower rates. Chief economic advisor Kevin Hassett is viewed as the frontrunner. This could make USD supporters a bit hesitant about taking bold positions, perhaps giving more support to the EUR/USD pair.
On the other hand, the euro has been gaining some traction, likely due to the acknowledgment that the European Central Bank (ECB) is finished with rate cuts. However, traders seem to be holding off, waiting for Thursday’s significant ECB Governing Council meeting. Additionally, the postponed U.S. Non-Farm Payrolls (NFP) report expected on Tuesday may energize the EUR/USD pair.
