EUR/USD slipped to fresh weekly lows after failing again near the 1.1600 zone, dropping toward 1.1565 following the latest Eurozone inflation release. The pair is hovering around 1.1575 at the time of writing, extending last week’s downward move as risk-off sentiment boosts demand for the safe-haven US Dollar (USD).
Eurostat data published on Wednesday showed that the Eurozone Harmonised Index of Consumer Prices rose to 0.2% in October from 0.1% in September. However, annual inflation eased slightly to 2.1% from 2.2%, coming closer to the European Central Bank’s (ECB) 2% target. Core HICP increased 0.3% on a monthly basis and held steady at 2.4% year-on-year.
On Tuesday, US data did little to support the Greenback. Initial Jobless Claims for the week of October 18 rose more than expected, while ADP figures showed businesses cut an average of 2,500 jobs per week in the four weeks ending November 1. Overall, the data points to a cooling US labour market.
Expectations for a Federal Reserve rate cut in December have inched higher, though Richmond Fed President Thomas Barkin noted on Tuesday that policymakers still need additional data before confirming their next steps.
Later today, attention shifts to the minutes of the October Fed meeting, due at 19:00 GMT. Market moves may stay limited until Thursday’s key US Nonfarm Payrolls report.
Daily Market Highlights
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The Euro continues to trade without clear direction near weekly lows, pressured by a cautious market tone that supports the US Dollar. Risk aversion and weakness in global equities are keeping EUR under pressure.
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In the US, Initial Jobless Claims rose to 232,000 and Continuing Claims increased to 1.957 million for the week ending October 18, compared with 219,000 and 1.926 million in the previous release on September 19 before the government shutdown.
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ADP data showed US businesses cut an average of 2,500 jobs per week in the latest four-week period. While better than the prior week’s average of 11,250, the trend still signals softening labour conditions and adds pressure on the Fed to consider more rate cuts.
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On a positive note, US Factory Orders for August rose 1.4%, matching forecasts and reversing the 1.3% drop from July. The data had limited impact on USD performance.
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Later in the US session, the Fed’s October meeting minutes may offer more clarity on monetary policy direction. However, the main focus this week remains Thursday’s long-awaited September Nonfarm Payrolls report.
