EUR/USD slips below 1.1900 as hawkish Fed pushback lifts Dollar
- EUR/USD pulls back as hawkish Fed rhetoric offsets softer US economic data.
- Weak Retail Sales and cooler Employment Cost Index point to consumer strain and rising labor slack.
- Policy divergence persists, with European Central Bank steady as Fed easing bets stay priced.
The Euro retreats during the North American session edges below the 1.1900 figure against the Greenback as some Federal Reserve officials pushed back against further rate cuts, even though US Retail Sales data, disappointed traders. At the time of writing, the EUR/USD trades at 1.1895 after reaching a daily high of 1.1928.
Euro eases despite weak US Retail Sales as Federal Reserve officials dampen near-term rate-cut expectations
Market mood remains negative as US equities turned negative in the day. Economic data from the US revealed that households are struggling with higher prices and show concerns about the labor market, as Retail Sales in December came at 0% MoM, below estimates for a 0.4% increase and November’s 0.6% print.
At the same time, the Employment Cost Index (ECI) for the last quarter of 2025 rose by 0.7% QoQ, beneath the July-September quarter of 0.8% and missed estimates. The report suggests that there’s some weakness in the labor market as policymakers use the ECI as a measure of jobs market slack.
Fed policymakers push back against lowering interest rates
In the meantime, Federal Reserve Regional Bank Presidents, crossed the wires. Dallas Fed Lorie Logan said commented that monetary policy is neutral, that inflation risks are tilted to the upside and that she is more concerned with that, than downside growth risks.
Earlier, Cleveland’s Fed Beth Hammack she was also hawkish, said that “it is important to get 2% inflation before changing rates again.” She added that inflation is too high and that tariff issues are still in play.
In Europe, the economic docket was absent on Tuesday, yet the European Central President Christine Lagarde seems confident that inflation in the bloc will stabilize at around 2% in the medium term.
Aside from this divergence between the Fed and the ECB, favors further EUR/USD upside. Data from Prime Market Terminal shows that money markets had priced in nearly 60 basis points of interest rate reductions of the Federal Reserve. Conversely, the ECB is projected to hold rates unchanged throughout the year and with first move expected to see being a rate rise.
Economic schedule for February 12
The Eurozone docket will feature speeches by ECB’s Mario Cipollone and Isabel Schnabel. Across the pond, traders will eye Nonfarm Payrolls figures, the update of the Unemployment Rate and speeches by Fed officials Jeffrey Schmid, Michell Bowman and Beth Hammack.
Euro Price This week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.68% | -0.43% | -2.02% | -0.89% | -0.95% | -0.46% | -1.27% | |
| EUR | 0.68% | 0.23% | -1.40% | -0.22% | -0.21% | 0.27% | -0.56% | |
| GBP | 0.43% | -0.23% | -1.33% | -0.45% | -0.43% | 0.00% | -0.89% | |
| JPY | 2.02% | 1.40% | 1.33% | 1.19% | 1.11% | 1.59% | 0.77% | |
| CAD | 0.89% | 0.22% | 0.45% | -1.19% | 0.02% | 0.40% | -0.44% | |
| AUD | 0.95% | 0.21% | 0.43% | -1.11% | -0.02% | 0.48% | -0.46% | |
| NZD | 0.46% | -0.27% | -0.00% | -1.59% | -0.40% | -0.48% | -0.89% | |
| CHF | 1.27% | 0.56% | 0.89% | -0.77% | 0.44% | 0.46% | 0.89% |
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).
Technical outlook: EUR/USD to remain trading sideways, waiting for fresh catalyst
The EUR/USD trend is neutral, yet after establishing a higher lower low after hitting the yearly high of 1.20979 at around 1.1765. Since then, the pair has rallied towards 1.1900, though bullish momentum has faded as depicted by the Relative Strength Index (RSI).
For a bullish outcome, traders are eyeing a decisive break above 1.1900. Once cleared, the next stop would be the January 30 high at 1.1974, followed by January 29 peak at 1.1996 ahead of 1.2000.
Conversely, if bears drive price below the 1.1850 area, it will expose the 1.1800 figure, followed by the February 6 cycle low of 1.1765. A breach of the latter will open the door to tes the 100-day Simple Moving Average (SMA) at 1.1681, ahead of the 200-day SMA at 1.1625.
EUR/USD Price Chart – Daily
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.
Recommended Articles
