EUR/USD holds in range as US government reopening hopes lift mood
- The Euro keeps moving sideways near the mid-range of the 1.1500s.
- Hopes of an end to the US government closure have provided some support to the US Dollar.
- German economic sentiment and US private employment data are likely to drive markets today.
EUR/USD is showing a moderate decline, although it remains within the previous days' ranges, trading above 1.1550 at the time of writing on Tuesday. A deal to end the US government shutdown has given the US Dollar a fresh push, but the positive market sentiment is keeping the pair afloat.
The US Senate approved a funding package on Monday that would allow for the reopening of the government after a 35-day closure, its longest in history. The law will now be sent to Congress, where it is expected to be approved as early as Wednesday to be signed by US President Donald Trump.
In Tuesday's Eurozone economic calendar, European Central Bank (ECB) President Christine Lagarde's comments and the German ZEW Survey – Economic Sentiment Index are likely to drive markets, while in the US, the focus will be on the ADP 4-week employment report.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.10% | 0.40% | 0.12% | 0.16% | 0.33% | 0.24% | 0.03% | |
| EUR | -0.10% | 0.30% | 0.02% | 0.06% | 0.23% | 0.14% | -0.07% | |
| GBP | -0.40% | -0.30% | -0.26% | -0.24% | -0.09% | -0.16% | -0.36% | |
| JPY | -0.12% | -0.02% | 0.26% | 0.02% | 0.20% | 0.10% | -0.09% | |
| CAD | -0.16% | -0.06% | 0.24% | -0.02% | 0.18% | 0.08% | -0.12% | |
| AUD | -0.33% | -0.23% | 0.09% | -0.20% | -0.18% | -0.09% | -0.34% | |
| NZD | -0.24% | -0.14% | 0.16% | -0.10% | -0.08% | 0.09% | -0.20% | |
| CHF | -0.03% | 0.07% | 0.36% | 0.09% | 0.12% | 0.34% | 0.20% |
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: US Dollar ticks up on government funding deal
- News of a deal to reopen the US government has given a marginal push to the Dollar against a basket of its main currency peers, but they have also lifted market sentiment, providing support to risk-related assets like the Euro. This leaves the EUR/USD pair trading sideways without a clear bias.
- Later on the day, the German ZEW Survey – Economic Sentiment data is expected to show a mild improvement to a 40 reading in November, from 39.3 in October. The Current Situation index is expected to have improved to -77.5 in November from -80 in the previous month. Still levels well below the historic averages, which are not expected to provide significant support to the Euro.
- During the US session, the focus will be on the US ADP Employment Change 4-week average. Last week, a better-than-expected 42K net increase in employment eased some of the worst fears of a sharp deterioration of the US Labour market.
- On Monday, a batch of Federal Reserve (Fed) speakers reflected the divergences among the committee, with Governor Stephen Miran calling for further interest rate cuts, while St. Louis Fed President Alberto Mussalem and San Francisco Fed President Mary Daly are showing a more cautious view on monetary policy.
Technical Analysis: EUR/USD consolidating between 1.1540 and 1.1580
The EUR/USD pair is in a consolidation phase, following the recovery from 1.1470 lows last week. Bulls have been capped at the 1.1580 area, while downside attempts remain contained above 1.1540. The 4-hour Relative Strength Index (RSI) is flattening near the 50 level, highlighting a neutral market.
Bulls would have to breach the 1.1580-1.1590 area (November 7, 10 highs) to shift the focus towards the resistance area around 1.1615, where the October 27 low meets a trendline resistance from early October highs. Further up, the target is the October 28 and 29 highs near the area of 1.1670.
Downsie attempts, on the other hand, have found support at the 1.1530-1.1540 area (near November 7,10 lows) ahead of the 1.1500 psychological level and the key support at the November 5 low around 1.1470.
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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