EUR/USD ticks down from highs ahead of Eurozone Retail Sales data
- The Euro pulls back from 1.1677 highs but remains steady above 1.1650.
- The US dollar recovers from lows in a calm trading session.
- Technically, the Euro is correcting lower within a broader bullish bias.
EUR/USD is pulling back from its highest levels in more than six weeks, trading at 1.1655 at the time of writing on Thursday, yet holding most of the ground taken on an eight-day rally. The US Dollar (USD) has ticked up from its lows, with markets in a calm session, while investors' focus shifts to the Eurozone Retail Sales and US Initial Jobless Claims figures, due later in the day.
The Euro (EUR) rushed higher on Wednesday after the Eurozone HCOB Services Purchasing Managers' Index reported that the sector's activity grew at its fastest pace in more than two years, with manufacturing data in France and Germany, the region's leading economies, also beating expectations.
US economic data, on the contrary, failed to cheer investors, especially the ADP Employment Change report, which showed an unexpected loss in net jobs, adding to evidence of the deteriorating labour market and cementing hopes that the US Federal Reserve (Fed) will cut interest rates by 25 basis points next week.
Markets are also pricing a more dovish Fed chairman to replace Jerome Powell at the end of his term, in May 2026. With White House economic advisor Kevin Hassett emerging as the best positioned for the job, investors are starting to consider the possibility of a steep monetary easing cycle next year, which is weighing heavily on the Greenback.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | 0.06% | 0.02% | 0.09% | -0.17% | 0.09% | 0.11% | |
| EUR | -0.06% | -0.01% | -0.02% | 0.03% | -0.22% | 0.00% | 0.05% | |
| GBP | -0.06% | 0.00% | -0.04% | 0.03% | -0.23% | 0.00% | 0.05% | |
| JPY | -0.02% | 0.02% | 0.04% | 0.07% | -0.18% | 0.02% | 0.10% | |
| CAD | -0.09% | -0.03% | -0.03% | -0.07% | -0.25% | -0.05% | 0.02% | |
| AUD | 0.17% | 0.22% | 0.23% | 0.18% | 0.25% | 0.23% | 0.27% | |
| NZD | -0.09% | -0.01% | -0.00% | -0.02% | 0.05% | -0.23% | 0.04% | |
| CHF | -0.11% | -0.05% | -0.05% | -0.10% | -0.02% | -0.27% | -0.04% |
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: ECB-Fed monetary policy divergence supports the Euro
- Euro dips are likely to remain shallow, as monetary policy divergence between the Fed and the European Central Bank (ECB)supports the common currency. The market is pricing a 25-basis-points rate cut by the Fed after its December 10 meeting, and probably two or three more cuts next year. The ECB, on the contrary, is widely expected to stand pat in December, and odds of a rate cut in 2026 are minimal so far.
- Eurozone data released on Wednesday endorsed this view. November's final HCOB Services Purchasing Managers Index was revised up to 53.6 from the previously estimated 53.1 reading. This marks the sixth consecutive month of expansion of the sector's activity and the best performance since May 2023. Likewise, service activity data from France was revised to 51.4 from 50.8, and German HCOB Services PMI to 53.1 from the previously estimated 52.7 reading.
- ECB President Christine Lagarde showed a positive tone regarding the Eurozone economy in her speech on Wednesday, assessing that household spending and a resilient labour market are supporting the economy of the region, and that underlying inflation remains consistent. These comments hint at steady interest rates after the December 18 meeting.
- In the US the ADP Employment Change report showed a 32,000 decline in net jobs in November, against market expectations of a 5,000 gain and following an upwardly revised 47,000 increase in October. This is the largest decline in more than two years and has boosted market concerns about the labour market's deterioration.
- US services activity data, on the contrary, beat expectations in November. The US ISM Services PMI rose to 52.6 from 52.4, and against the market consensus of a moderate slowdown to 52.1. New Orders, however, slowed down to 52.9 from 56.2 in the previous month, and the Employment Index contracted for the sixth consecutive month.
- This Thursday, the focus will be on the Eurozone Retail Sales figures, which are expected to have bounced 0.1% up in October after the 0.1% decline seen in September. Year-on-year, retail consumption is seen accelerating to a 1.4% growth from September's 1.0%.
- In the US, Initial Jobless Claims are expected to have increased by 220,000 in the last week of November, up from 216,00 in the previous week.
Technical Analysis: EUR/USD finds resistance above 1.1670
EUR/USD bulls found resistance at the 1.1670 area following an eight-day rally. The 4-hour Relative Strength Index (RSI) is pulling back from overbought levels, while the Moving Average Convergence Divergence (MACD) indicator remains above zero, highlighting a mild positive momentum.
Bulls have been capped a few pips above the 1.1670 area, where the pair was halted on October 28 and 29. A confirmation above that level would clear the path to the October 17 high, near 1.1730, ahead of the October 1 high, at 1.1778.
The broader upside bias from mid-November lows sub-1.1500 remains in play. Bears are limited above November 13 and 14 highs in the 1.1650 area, and trendline support is at 1.1615. Further down, the target is the December 2 low, at 1.1590.
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.
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