Insights 
VT 
Trade Tensions Ease
Following US President Trump’s positive meeting with China’s President Xi, trade tensions have eased with tariff reductions and resumed trade exchanges. Despite this optimism, market response remains moderate.
The Federal Reserve’s rate cut surprised investors, affecting the US Dollar and reshaping rate cut expectations. In the Eurozone, GDP growth reached 1.3% year-on-year, with economic sentiment and confidence indicators showing improvement.
Germany’s economy stalled in Q3 after a previous quarter contraction, with annual GDP bouncing back to 0.3% growth. The ECB’s decision, which will likely leave rates unchanged, is awaited for further direction.
EUR/USD forms a triangle pattern amid mixed technical signals, with support at 1.1580 and resistance near 1.1625. GDP figures from Eurostat and the Economic Sentiment Indicator highlight Eurozone’s economic climate.
Monetary Policy Dynamics
The US Dollar has strengthened following the Federal Reserve’s recent commentary, and we should expect this trend to continue. US core inflation data from September 2025 showed prices holding firm at 3.1% year-over-year, which is likely to keep the Fed from signaling any further rate cuts this year. This policy stance makes holding dollars more attractive than euros, suggesting we should be cautious about any significant EUR/USD upside.
While the Eurozone’s surprise 0.2% GDP growth is positive, it comes after a long period of economic stagnation we saw through 2023 and 2024. The latest flash inflation figures for the Eurozone in October 2025 came in at 2.4%, giving the European Central Bank little reason to adopt a more aggressive policy at its meeting later today. We anticipate the ECB will hold its deposit rate at 2.0%, reinforcing the growing interest rate advantage of the US Dollar.
