Solid Gold Berjangka – The Euro extended its decline against the US Dollar for the second consecutive day during Wednesday’s (Nov 11) trading session. The EUR/USD pair fell to around 1.1155—having previously touched the 1.1250 area—and is now hovering near its year-to-date low of approximately 1.1110.
Inflation data from Germany failed to provide any meaningful support for the Euro. The final Harmonized Index of Consumer Prices (HICP) for October fell by 0.1% month-on-month, while the year-on-year figure rose by 2.8%—aligning with initial estimates and marking a slowdown from the 3.3% increase recorded in September.
Meanwhile, the US Dollar received strong support following October’s Consumer Price Index (CPI) data, which came in higher than expected. Consumer prices rose 0.4% month-on-month, while the core CPI increased by 0.3%, reinforcing the view that inflationary pressures in the US remain elevated.
Expectations for further policy tightening by the Federal Reserve have intensified, following comments from Philadelphia Fed President Anna Paulson, who called for continued gradual tightening. Dallas Fed President Lorie Logan also indicated that the central bank likely requires at least two additional interest rate hikes of 25 basis points each.
The market has now almost fully priced in a rate hike for the Fed’s December meeting, with an approximately 12% probability of a 50-basis-point increase. These expectations are keeping the US Dollar strong and limiting the potential for a near-term recovery in the EUR/USD pair. (srh)