The EUR\/USD pair eased as the US Dollar strengthened, with EUR\/USD trading around 1.1773 after reaching an intraday high of 1.1802. The US economy showed stronger-than-expected growth in the third quarter, with GDP expanding at an annualised rate of 4.3%, surpassing both the prior estimate of 3.8% and market expectations of 3.3%.<\/p>\n
The GDP Price Index increased by 3.7%, above the forecast of 2.7% and prior reading of 2.1%. Core Personal Consumption Expenditures rose by 2.9%, matching expectations, and Personal Consumption Expenditures Prices increased by 2.8%, up from the previous 2.1%. This data indicates ongoing price pressures in the US economy.<\/p>\n
Durable Goods Orders in October showed weaker momentum, with a 2.2% decline, exceeding the expected 1.5% drop, reversing the previous month’s growth. Orders excluding transportation rose by 0.2%, below the anticipated 0.3%. Industrial Production declined 0.1% month-over-month in October, below the expected 0.1% increase.<\/p>\n
The US Dollar Index is currently around 98.10, slightly recovering after a dip. Traders are now focused on the upcoming US Consumer Confidence data, which could affect EUR\/USD’s near-term movements.<\/p>\n
With the US economy showing robust 4.3% growth in the third quarter of 2025, our focus shifts to strategies that favor a stronger dollar. The accompanying high inflation figures, with the GDP Price Index at 3.7%, suggest the Federal Reserve has little reason to consider easing policy soon. This environment makes bearish positions on EUR\/USD more attractive as we head into the new year.<\/p>\n
This view is reinforced by current market pricing from the CME’s FedWatch Tool, which now indicates a less than 15% probability of a rate cut in the first quarter of 2026, down from over 40% just a month ago. The market is clearly digesting the reality of higher-for-longer US interest rates. This policy divergence strongly supports the dollar against the euro.<\/p>\n
For derivative traders, this suggests buying January or February 2026 put options on the EUR\/USD is a sensible approach. Strike prices around 1.1700 or 1.1650 could offer good value, providing a way to profit if the pair breaks below its recent support levels. This is a direct play on continued dollar strength driven by the Fed’s firm stance.<\/p>\n
However, the weaker October data on Durable Goods and Industrial Production introduces some uncertainty about the economy’s momentum entering the fourth quarter. This potential for volatility can be traded by using straddles ahead of the next FOMC meeting in January 2026. Such a strategy would profit from a significant price move in either direction.<\/p>\n
We’ve seen a similar pattern before, looking back at the 2022-2023 cycle when stubborn inflation kept the Fed in a hawkish mode far longer than many anticipated. During that period, the dollar index (DXY) rallied significantly as policy divergence with other central banks widened. The current data from late 2025 is setting up a comparable dynamic.<\/p>\n
Adding to this, recent data from Eurostat showed that headline inflation in the Eurozone cooled to 2.5% in November 2025, which is much closer to the European Central Bank’s target. This puts more pressure on the ECB to consider rate cuts sooner than the Fed. This growing divergence between the two economies is a fundamental reason to expect a lower EUR\/USD.<\/p>\n
The upcoming US Consumer Confidence report for December will be a critical near-term catalyst. A strong reading would likely solidify dollar momentum and could be the trigger that pushes EUR\/USD decisively below the 1.1750 support level. We should be prepared for a quick move if the data confirms the economy’s resilience.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EUR\/USD slips as strong US GDP and inflation data lift the Dollar; traders eye consumer confidence next.<\/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-43493","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-ca\/wp-json\/wp\/v2\/posts\/43493","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=43493"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/43493\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16964"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=43493"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=43493"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=43493"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}