EUR/USD is trading higher for the third consecutive day on Thursday and changes hands at one-week highs beyond 1.1650 at the time of writing. Investors’ concerns about the escalating trade tensions between the US and China, while in Europe, French Prime Minister Sébastien Lecornu has survived two no-confidence votes, which has provided additional support to the Euro.
Lecornu unexpectedly survived the second and final no-confidence vote on Thursday. The motion, put forward by Marine Le Pen obtained only 144 votes, way short of the 289 votes needed to topple the government, as left-wing party La France Insoumise refused to join the far right. The Prime Minister ditched Macron’s controversial pensions reform plan, which has provided him with a lifeline, although he still faces the challenge of approving aaa belt-tightening budget amid a very divided parliament.
Tensions between US and China remain at a boiling point.tt, as President Donald Trump affirmed in a TV interview that the US is already in a trade war with China. On Thursay, comments by Treasury Secretary Scott Bessent calling the Chinese Trade negotiator “unhinged “wolf have failed to ease nerves.
In the economic calendar, European Central Bank (ECB) President Christine Lagarde’s speech will be observed with interest later on Thursday. In the US session, the Philadelphia Fed Manufacturing Survey will be one of the few economic indicators released this week, ahead of a string of speeches from Fed policymakers.
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 | -0.14% | -0.10% | 0.02% | -0.08% | 0.17% | -0.34% | -0.10% | |
| EUR | 0.14% | 0.04% | 0.14% | 0.05% | 0.23% | -0.22% | 0.00% | |
| GBP | 0.10% | -0.04% | 0.16% | 0.02% | 0.16% | -0.26% | -0.01% | |
| JPY | -0.02% | -0.14% | -0.16% | -0.09% | 0.21% | -0.37% | -0.11% | |
| CAD | 0.08% | -0.05% | -0.02% | 0.09% | 0.26% | -0.28% | -0.06% | |
| AUD | -0.17% | -0.23% | -0.16% | -0.21% | -0.26% | -0.44% | -0.35% | |
| NZD | 0.34% | 0.22% | 0.26% | 0.37% | 0.28% | 0.44% | 0.24% | |
| CHF | 0.10% | -0.01% | 0.00% | 0.11% | 0.06% | 0.35% | -0.24% |
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: Mounting US-China trade tensions keep hurting the US Dollar
- The US Dollar remains on its back foot. Concerns that the escalation of the tensions will take the trade relationships between the world’s two major economies to a point of no return are undermining confidence in the US Dollar.
- Investors remain hopeful that next week’s meeting between Trump and Chinese Prime Minister Xi Jinping may bring things back to normal, meaning a further extension of the trade truce, which ends on November 1, but the Greenback might remain vulnerable up to that moment.
- ECB committee member and Belgian central bank governor, Pierre Wunsch said earlier on Thursday that he is not uncomfortable with markets pricing a further rate cut, but thet the possibilities of that scenario have receded.
- Somewhat later, ECB’s governor, Martin Kocher has reiterated that view, affirming that “we are at the end of the rate cutting cycle or very close to it”.
- On Wednesday, the Federal Reserve assessed that US economic activity remained resilient over the last months, while consumer spending inched down. Employment demand remained muted amid economic uncertainty and higher prices due to rising import costs.
- Eurostat data reported that the Eurozone’s Industrial Production contracted at a 1.2% pace in August following a 0.3% increment in July. These figures improve the 1.6% decline forecasted by market analysts and, therefore, the impact on the Euro was minimal.
Technical Analysis: EUR/USD is testing the channel top at 1.1670
EUR/USD’s bullish momentum improved on Wednesday as price action breached the neckline of a Double Bottom pattern at 1.1635. This is often a signal of a trend shift, but bulls will need to break the top of the descending channel at the 1.1670 area, which is under pressure at the moment.
The measured target of the Double Bottom pattern is at the October 6 high, near 1.1730. Further up, the next resistance would be the October 1 high, near 1.1780, although that one seems too far a target for this Thursday.
To the downside, the previous resistance, at 1.1630 is likely to act as support ahead of Wednesday’s low in the area of 1.1600. A bearish move below these levels would bring the October 9, and 14 lows at 1.1542 back into focus.
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.
