• EUR/USD loses traction to around 1.0550 in Monday’s Asian session.
  • Markets see a potential December rate cut by the Fed. 
  • The ECB is anticipated to cut another 25 bps at its December meeting on Thursday.

The EUR/USD pair trades with a mild negative bias near 1.0550 on Monday during the Asian trading hours. Investors will closely monitor the US Consumer Price Index (CPI) inflation report for November, which is due on Wednesday. On Thursday, the European Central Bank (ECB) interest rate decision will take center stage. Investors will be looking for clues about what comes next.

The expectation of a quarter-point rate cut by the Federal Reserve (Fed) on December 18 grew last week after the employment report showed strong job creation, but not at a pace that would necessarily deter Fed officials from lowering rates to between 4.25 and 4.5% from their current range of 4.5 to 4.75%. 

With hopes high for a US interest rate cut later this month, inflation data on Wednesday could serve as the one remaining potential stumbling block to a third successive rate cut from the Fed. The annual consumer price inflation is expected to rise to 2.7% YoY in November from 2.6% in October. Core inflation, which excludes volatile food and energy prices, is projected to be steady at 3.3% YoY in November. 

The European Central Bank (ECB) is expected to deliver its fourth interest rate cut of the year at its final policy meeting of 2024 on Thursday. Analysts expect the ECB to stick to its data-dependent guidance by reiterating that it “is not pre-committing to a particular rate path.” However, the ECB President Lagarde’s press conference could offer some hints about the interest rate outlook. Any dovish remarks from ECB policymakers could weigh on the Euro (EUR) against the US Dollar. 

Euro FAQs

The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day, according to data from the Bank of International Settlements. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% of all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.