Live Chat

Euro

Euro corrects against dollar after posting gains in late November

The euro to dollar rate fell below $1.092 on Friday amid growing expectations that major central banks will transition from tightening policies to implementing rate cuts in the coming year.

Flash consumer price inflation (CPI) data revealed a more significant-than-expected slowdown in inflation across the euro area, including Germany, Italy, and Spain. The Eurozone's core inflation rate gauge also dropped to 3.6%, hitting its lowest level since April 2022 and falling below the projected 3.9%.

The euro to dollar rate has also been impacted by members of the U.S. Federal Reserve appearing to step away from their previously hawkish stance. The DXY dollar index, a gauge of the U.S. currency’s strength against six major counterparts, has declined to trade around the 103 mark, while the euro has recorded a gain of more than 3% in November, marking its most substantial monthly increase since November 2022.

Calculate your Forex margin

Calculate your hypothetical required margin for a Forex position, if you had opened it now..

Category

Majors Search
Majors
Minors
Exotics

Instrument

Search
Clear input

Bid

Ask

Account Type

Direction

Quantity

Amount must be equal or higher than

Amount should be less than

Amount should be a multiple of the minimum lots increment

USD Down

Leverage

-

Required Margin

$-
Required margin is displayed in instrument currency

Required Margin

$-
Required margin is displayed in selected account currency

Current conversion price:

-
Start Trading

Past performance is not a reliable indicator of future results.

Euro forecast: Strength of rebound may be limited, analysts say

Shaun Osborne, Scotiabank’s Chief FX Strategist, wrote that corrective losses towards the 1.09 area could potentially extend in the short run. His most recent euro forecast identified the EUR/USD support level around 1.0880:

“Final Eurozone Manufacturing PMI data was revised up slightly to 44.2, from the preliminary November reading of 43.8. German and French data were revised up while Spain reported a stronger-than-expected 46.3 for the month. Italy’s 44.4 result was, however, below forecasts.

EUR/USD continues to consolidate.

Recent gains in spot look a little overcooked and corrective losses to the 1.09 area risk extending a little further in the short run to perhaps test 1.0825/1.0850. Intraday resistance is 1.0920/1.0925. Support is 1.0880.”

In a euro forecast issued on November 30, Citigroup economists said the strength of the euro rebound may be limited to the year-end:

“Given expectations for the economy have been so bearish thus far, a bottoming in Euro Area manufacturing could signal a near-term positive for EUR. However, the primary driver of EUR/USD over the medium to longer term is still based on the market expectations for the Fed’s against the ECB’s rates for 2024 and beyond.

The strength of the rebound in EUR/USD may have limited potential to the year-end, but the durability of the rebound could be affected by uncertainty surrounding Germany’s fiscal position due to the recent constitutional court ruling, and Italian’s fiscal constraints due to its weak economic fundamentals being largely ignored. This potentially augurs well for EUR’s outlook in 2024.”

Some institutions were highly bearish on EURUSD in previous months. In October, major Wall Street investment banks J.P. Morgan and Citibank forecast the euro to dollar exchange rate to reach parity by the end of the year.

At the time of writing on Friday, the EUR to USD pair was trading around the $1.0839 level (down over 0.40% on the day), as per MarketWatch data.

When considering foreign currency (forex) for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.

Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.

Latest news

New Zealand dollar drops on unexpected dovish tone from RBNZ

Wednesday, 10 July 2024

Indices

Unexpected dovish tone from RBNZ drops New Zealand dollar

Sterling steady as investors take in UK, French election results

Tuesday, 9 July 2024

Indices

Sterling steady near one-month high in wake of UK election

BP shares fall on Q2 profit warning

Tuesday, 9 July 2024

Indices

BP shares drop over 4% on Q2 lower profit warning

BP shares dip ahead of Powell Congress testimony

Tuesday, 9 July 2024

Indices

BP dips, Powell Congress speech ahead, records for Tokyo, NY

Live Chat