Solid Gold Berjangka – The Euro pared most of its gains against the US Dollar during European trading on Friday (October 30), after the EUR/USD pair failed to sustain its momentum above 1.1215. The pair remained slightly higher by approximately 0.11%, trading around 1.1188, as the dollar began to recover from earlier weakness.
The dollar’s recovery was supported by a combination of robust US economic growth and persistent inflationary pressures. These conditions reinforce expectations that the Federal Reserve still has room to raise interest rates in December. The US Dollar Index (DXY) hovered around 101.72, having previously dipped to 101.59.
Preliminary US GDP data for the third quarter showed an annualized growth rate of 3.4%—surpassing the 3.2% forecast and marking an increase from the 2.2% recorded in the previous quarter. Consumer spending served as a primary driver, growing by 3.8%, while business investment—particularly within the information technology sector—also made a strong contribution.
Pressure on the Euro was further compounded by US inflation data. The Core PCE—a key inflation metric closely monitored by the Fed—rose by 3.1% year-on-year in September, aligning with expectations and marking an increase from 3% in August. Sustained high inflation keeps the prospect of US monetary tightening alive, thereby limiting the potential for the EUR/USD pair to strengthen.
Within the Eurozone, investor attention has shifted toward Germany’s Harmonized Index of Consumer Prices (HICP) for October. Harmonized inflation is projected to slow to 3.1% year-on-year, down from 3.3% in September. A reading below expectations could exert further downward pressure on the Euro, whereas persistently high inflation might bolster expectations for a hawkish policy stance from the European Central Bank. (srh)