EUR/USD drifts lower at the European session opening on Thursday, trading right below 1.1600 at the time of writing, down from the previous day’s highs at 1.1620. Fresh trade frictions between the US and China are supporting the safe-haven US Dollar, yet with market volatility subdued as traders brace for the US Consumer Price Index (CPI) data, due on Friday.
In the absence of key macroeconomic data releases, as the US government shutdown continues, trade frictions remain one of the most significant market drivers. In that sense, news that the US is considering curbs on software-related exports to China has revived the trade rift between the world’s two major economies.
The impact on markets, however, has been moderate, as investors are still confident that a meeting between US President Donald Trump and his Chinese counterpart Xi Jinping will lead to an extension of the trade truce, avoiding these threats from materializing.
In Thursday’s economic calendar, the speech of European Central Bank (ECB) committee member Philip Lane and the release of the Eurozone’s Consumer Confidence index will attract attention. In the US, the Chicago and Kansas Federal Reserve (Fed) National Activity Indexes and speeches by Fed governors Michelle Bowman and Michael Barr will provide the fundamental guidance for USD crosses.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.07% | 0.07% | 0.27% | -0.01% | -0.07% | 0.05% | 0.13% | |
| EUR | -0.07% | 0.00% | 0.21% | -0.08% | -0.13% | -0.02% | 0.06% | |
| GBP | -0.07% | -0.00% | 0.18% | -0.07% | -0.13% | -0.02% | 0.06% | |
| JPY | -0.27% | -0.21% | -0.18% | -0.29% | -0.32% | -0.24% | -0.13% | |
| CAD | 0.00% | 0.08% | 0.07% | 0.29% | -0.04% | 0.06% | 0.13% | |
| AUD | 0.07% | 0.13% | 0.13% | 0.32% | 0.04% | 0.11% | 0.21% | |
| NZD | -0.05% | 0.02% | 0.02% | 0.24% | -0.06% | -0.11% | 0.08% | |
| CHF | -0.13% | -0.06% | -0.06% | 0.13% | -0.13% | -0.21% | -0.08% |
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: The USD picks up as the US announces new trade restrictions
- The US Dollar regains some upside momentum as the White House suggested on Wednesday the possibility of introducing restrictions on a wide range of software products in retaliation for China’s decision to curb exports of rare earths.
- US Treasury Secretary Scott Bessent tried to calm markets, affirming that US officials are entering negotiations with the Chinese authorities with “good intentions” and “great respect.”
- US President Donald Trump contributed to easing concerns by downplaying the impact of China’s restrictions on rare earths’ exports and reiterating his confidence in reaching agreements with Chinese leader Xi on topics ranging from soybean trade to nuclear weapons or a ceasefire in Ukraine.
- In Europe, ECB Vice President Luis de Guindos affirmed, also on Wednesday, that the Eurozone’s inflationary risks are balanced, underscoring the positive developments of consumer prices and reiterating that the current interest rates are adequate.
- The highlight of the week will be the delayed release of the September US CPI report, finally due on Friday. Consumer inflation is seen accelerating to 3.1% year-on-year, from 2.9% in August, while the core inflation is seen steady at 3.1%. These figures, however, are unlikely to dampen expectations of a Fed interest rate cut in October.
Technical Analysis: EUR/USD is hovering above the 1.1580 support area
EUR/USD maintains its bearish trend intact, with upside attempts finding sellers. The pair was capped at 1.1620 and is now hovering above support at Wednesday’s low near 1.1580. The Relative Strength Index (RSI) remains below the 50 area, highlighting negative momentum, and the Moving Average Convergence Divergence (MACD) remains below the signal line.
Below 1.1580, the October 9 and 14 lows in the area of 1.1545 will come into focus. Further down, the channel bottom, now around 1.1455, emerges as the next potential target. To the upside, Wednesday’s high, at 1.1620 and the top of the descending channel, around 1.1625, are likely to challenge bulls ahead of the October 21 high, around 1.1650, and 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.
