EUR/USD has retraced previous losses to reach nearly two-month highs above 1.1710 at the time of writing, after bouncing from 1.1680 earlier in the day. An improving market sentiment has provided additional support to the Euro while the US Dollar remains on its back foot, as the market digests Wednesday’s dovishly tilted US Federal Reserve (Fed) monetary policy
Investors have shrugged off the risk-averse sentiment triggered by downbeat sales and revenue forecasts released by the cloud computing giant Oracle on Wednesday, which renewed market concerns about an overvaluation of the AI sector. European equity markets have turned positive after a negative opening, although Wall Street futures are still showing moderate losses.
On Wednesday, the US Dollar, which had tumbled across the board, followed a less hawkish-than-expected monetary policy decision by the Fed on Wednesday. The US central bank cut interest rates by 25 basis points, as expected, but hawkish dissent was weak, and Chairman Jerome Powell showed more relaxed about inflation, which hints at further rate cuts in 2026.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.19% | 0.03% | -0.08% | 0.00% | 0.30% | 0.06% | -0.45% | |
| EUR | 0.19% | 0.22% | 0.11% | 0.19% | 0.51% | 0.26% | -0.26% | |
| GBP | -0.03% | -0.22% | -0.10% | -0.02% | 0.27% | 0.03% | -0.48% | |
| JPY | 0.08% | -0.11% | 0.10% | 0.10% | 0.39% | 0.12% | -0.36% | |
| CAD | -0.01% | -0.19% | 0.02% | -0.10% | 0.31% | 0.03% | -0.45% | |
| AUD | -0.30% | -0.51% | -0.27% | -0.39% | -0.31% | -0.25% | -0.73% | |
| NZD | -0.06% | -0.26% | -0.03% | -0.12% | -0.03% | 0.25% | -0.50% | |
| CHF | 0.45% | 0.26% | 0.48% | 0.36% | 0.45% | 0.73% | 0.50% |
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: Risk aversion halts the Euro’s rally
- The Euro jumped on US Dollar weakness following Wednesday’s Fed decision, but bulls have been halted above 1.1700 amid the risk-averse market. If sentiment remains sour, the Euro is likely to struggle. Downside attempts, however, are likely to remain limited amid the dovish Fed message.
- The Federal Reserve cut rates by 25 basis points to the 3.50%-3.75% range on Wednesday, and the dot plot signalled only one further rate cut in 2026. The absence of a more hawkish divergence, with only two votes calling for steady rates, and Chairman Powell’s comments ruling out rate hikes, are keeping investors confident that the bank will cut rates at least two more times next year, as reflected on the CME Group FedWatch tool.
- Beyond that, the market is also pricing the replacement of Jerome Powell by a more dovish Kevin Hassett at the end of his term in May. Hassett, the White House economic adviser, affirmed earlier this week that there is “plenty of room” to cut interest rates further.
- The Fed also announced a bond-buying program starting on December 12 with an initial round of $40 billion, aiming to support market liquidity, which took investors by surprise and added pressure on the USD.
- In Europe, the European Central Bank (ECB) President, Christine Lagarde, stuck to her usual rhetoric while talking at the Financial Times Global Boardroom Conference in London on Wednesday. She reiterated that the bank’s monetary policy remains in good shape and suggested that ECB officials might lift the region’s growth forecasts again, adding to evidence that the easing cycle has reached its end.
- The European economic calendar is void on Thursday, while in the US, Initial Jobless Claims data will be observed with interest to confirm whether the previous week’s decline was due to the Thanksgiving holiday or it was a signal of some improvement in the labour market.
Technical Analysis: EUR/USD bulls are looking at 1.1730
The EUR/USD technical picture has turned positive after breaking resistance at the 1.1680 area. The 4-hour Moving Average Convergence Divergence (MACD) is printing green bars, showing a strong bullish momentum, and the 4-hour Relative Strength Index (RSI) is in positive territory, still below overbought levels. In this context, and with the US Dollar Index depressed, further appreciation is on the cards.
The pair has confirmed above 1.1705, and bulls are now targeting the October 17 high, near 1.1730. The next target would be the October 1 high around 1.1780. On the downside, the December 4 high, near 1.1680, is providing support ahead of the December 9 low, at 1.1615, and the December 1 and 2 lows, around 1.1590.
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US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022.
Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates.
When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
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