The EUR\/USD slipped by 0.16% to 1.1722 following subdued US inflation data and resilient jobless claims. The European Central Bank (ECB) kept interest rates unchanged, with President Lagarde suggesting the end of the rate-cutting cycle. Market participants await US Core PCE data and the Michigan Consumer Sentiment Index for hints on the Fed’s future policy.<\/p>\n
In the US, November’s inflation metrics witnessed their lowest since early 2021. Jobless claims showed improvement, surpassing economist predictions. ECB maintained rates, indicating a potential end to rate adjustments, evidencing a meeting-by-meeting review process. The EUR\/USD remained stable, with focus shifting to upcoming American economic indicators.<\/p>\n
US inflation, as reported by the Bureau of Labor Statistics, rose 2.7% year-over-year, with core inflation decreasing to 2.6%. Unemployment claims dropped to 224,000. While expectations for the Fed reducing rates in January stood firm at 2.4%, a 60 basis point easing by the end of 2026 is anticipated. Chicago Fed President noted declining inflation and potential future rate cuts despite maintaining a cautious stance.<\/p>\n
The EUR\/USD consolidates in the 1.1700-1.1800 range amid low trading and drying liquidity. With a bullish outlook, traders need to breach 1.1750 for further gains. Falling below 1.1700 could test the 100-day Simple Moving Average near 1.1652.<\/p>\n
Looking back at this time in 2024, when EUR\/USD was consolidating around 1.17, gives us a useful benchmark for the current market. Today, we are seeing the pair trading at a lower level of 1.1485 as the policy differences between the US and Europe have become much clearer. The expected low-liquidity holiday drift we saw last year may not hold, as traders are now actively repricing rate cut expectations for 2026.<\/p>\n
The European Central Bank, which hinted its easing cycle might be over in late 2024, has since struggled with a stagnant Eurozone economy. After a brief pause, the ECB cut rates twice in mid-2025 to stimulate growth, bringing the deposit facility rate down to 1.50%. However, the latest flash estimate from Eurostat for November 2025 showed Harmonized Index of Consumer Prices (HICP) inflation remains stubbornly low at 1.8%, below the bank’s target.<\/p>\n
Conversely, the Federal Reserve has been forced to stay on hold for longer than markets anticipated this time last year. The disinflationary trend seen in late 2024 stalled through 2025, with the most recent US Consumer Price Index (CPI) data for November 2025 coming in at 3.0%, well above the Fed’s goal. This persistence, driven by services inflation, is a significant change from the 2.6% core inflation reading we saw in November 2024.<\/p>\n
This widening policy gap is creating a clear trend, unlike the sideways market we experienced at the end of 2024. The US economy has remained robust, with the Bureau of Labor Statistics reporting that November 2025 Non-Farm Payrolls added a healthy 190,000 jobs, keeping the unemployment rate at a low 3.9%. This economic strength supports a stronger dollar, as the market now barely prices in 25 basis points of Fed cuts for the entirety of 2026.<\/p>\n
In the coming weeks, this environment suggests that positioning for further dollar strength against the euro is the logical path. Buying short-dated EUR\/USD put options with strike prices around 1.1400 could offer a cost-effective way to trade a potential break of recent lows. While holiday liquidity can be thin, a move below the 1.1450 support level could trigger a sharp decline, presenting a different scenario from the quiet consolidation we saw twelve months ago.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EUR\/USD dips after soft US inflation; ECB holds rates steady, markets eye upcoming Fed policy signals.<\/p>\n","protected":false},"author":62,"featured_media":16964,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-37287","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/37287","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=37287"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/37287\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16964"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=37287"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=37287"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=37287"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}