EUR/USD remains trading within previous ranges, unable to find acceptance above 1.1620, despite the upbeat German and Eurozone business activity figures released earlier on Friday. The pair changes hands at 1.1615, at the time of writing, barely changed on daily charts, with all eyes on the US Consumer Price Index (CPI) release, due later on the day.
Eurozone’s HCOB Purchasing Managers Index (PMI) data revealed an unexpected expansion of the manufacturing sector’s activity in October and a stronger-than-expected growth in the Services sector, which has shown the strongest activity in the last 12 months. These figures improve the outlook of the Eurozone’s economy and endorse the European Central Bank’s (ECB) hawkish side, dampening hopes of further monetary easing in the coming months.
The common currency, however, has remained on the back foot this week as US President Donald Trump soured market sentiment, threatening new restrictions on software exports to China on Thursday, ahead of next week’s meeting with Chinese President Xi Jinping.
Trade issues remain in the spotlight on Friday, as President Trump revived frictions, this time with Canada, publishing a post on social media assuring that trade negotiations with his northern neighbour have “terminated”, apparently due to an advert that featured former US president Ronald Reagan speaking negatively about tariffs.
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 | 0.03% | 0.02% | 0.21% | 0.19% | 0.23% | 0.17% | 0.09% | |
| EUR | -0.03% | -0.01% | 0.18% | 0.17% | 0.20% | 0.14% | 0.06% | |
| GBP | -0.02% | 0.01% | 0.18% | 0.17% | 0.21% | 0.14% | 0.07% | |
| JPY | -0.21% | -0.18% | -0.18% | -0.03% | 0.02% | -0.06% | -0.12% | |
| CAD | -0.19% | -0.17% | -0.17% | 0.03% | 0.03% | -0.03% | -0.12% | |
| AUD | -0.23% | -0.20% | -0.21% | -0.02% | -0.03% | -0.06% | -0.14% | |
| NZD | -0.17% | -0.14% | -0.14% | 0.06% | 0.03% | 0.06% | -0.07% | |
| CHF | -0.09% | -0.06% | -0.07% | 0.12% | 0.12% | 0.14% | 0.07% |
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: Upbeat Eurozone PMIs provide some support to the Euro
- The Euro has picked up from lows following better-than-expected preliminary Eurozone PMIs for October. The HCOB Manufacturing PMI improved to 50.0 from 49.8 in September against the market consensus of a slight decline to 49.5. The HCOB Services PMI rose to 52.6 from 51.3, again, beating expectations of a slowdown to 51.1.
- Somewhat earlier, German PMI figures showed a slight improvement in the manufacturing activity to 49.6 from last month’s 49.5, while the Services sector’s activity accelerated to 54.5 from 51.5 in September, also beating expectations of a slowdown to 51.0.
- The US Dollar (USD), however, is moving within recent ranges, on track for a moderate weekly advance as fresh trade woes have kept risk appetite subdued this week. Investors are awaiting US inflation data release due later on Friday, although the main focus remains on the Trump-Xi meeting and the Fed’s monetary policy decision next week.
- The highlight of the week is the release of September’s US CPI, which is expected to have risen at a steady 0.4% pace in the month, and 3.1% year-on-year, up from August’s 2.9% reading., The core CPI, however, is seen growing at the same pace as in the previous month, at a 3.1% yearly rate.
- These figures will frame next week’s Fed decision, although investors are practically fully pricing a quarter-point rate cut. The CME Group’s Fed Watch tool shows a 98.9% chance that the central bank will trim its benchmark interest rate by 25 basis points on Wednesday and a 91% chance of another such cut in December.
Technical Analysis: EUR/USD treads water around 1.1600
EUR/USD remains trading within a descending channel, with rallies finding sellers. Recent price action has remained trapped within a narrow range between 1.1620 and the support area at 1.1580, with investors looking for fundamental drivers to determine the pair’s near-term direction.
Technical indicators are pointing lower on the 4-hour chart, with the Relative Strength Index (RSI) unable to regain the 50 level. Bears, however, would need to confirm below the mentioned 1.1580 support to clear the way towards the October 9 and 14 lows, in the area of 1.1545. Further down, the 1.1500 round level appears as a potential target ahead of the channel bottom, now around 1.1450.
Bullish attempts have remained capped below 1.1620, where Thursday’s high meets the channel top. A successful breach of this level would shift the focus towards the October 21 high, around 1.1650, ahead of the October 17 high, at 1.1728.
Euro FAQs
The Euro is the currency for the 19 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.
EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy.
The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa.
The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control.
Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency.
A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall.
Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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