"The EUR/USD pair is passing through a highly sensitive phase, where multiple economic and political factors intersect, painting a blurred picture of the euro's outlook against the U.S. dollar. While the euro struggles to hold above critical support levels near 1.15501.1600, signs of weakness continue to emerge from the European economy particularly with accelerating inflation in Germany and declining risk appetite amid a turbulent global environment."
"In my view, what further complicates the picture is the prevailing risk-off sentiment that has dominated markets since renewed trade tensions between the United States and China resurfaced. Investor appetite for high-yield assets has faded, with capital flows shifting toward safe havens such as the U.S. dollar and Japanese yen. This defensive behaviour naturally undermines the euro, especially given its role as a funding currency during periods of economic stress and global uncertainty."
"German inflation data has added to the uncertainty rather than offering any solid support for the common currency. The final reading of the CPI showed an increase to 2.4% in September from 2.2% in August, a historically high level that doesn't necessarily translate into monetary optimism. Inflation in this case is largely cost-driven, fuelled by rising energy and commodity prices, rather than stronger domestic demand. As a result, the European Central Bank (ECB) is likely to remain cautious"
EUR/USD trades in a sensitive phase as the euro struggles to hold above critical support near 1.15501.1600 amid emerging European weakness. German CPI rose to 2.4% in September from 2.2% in August, a historically high, cost-driven increase tied to energy and commodity prices rather than domestic demand. Risk-off sentiment intensified by renewed U.S.-China trade tensions has reduced appetite for high-yield assets and shifted capital toward safe havens such as the U.S. dollar and Japanese yen. The euro's role as a funding currency leaves it vulnerable, limiting sustainable rebounds while markets await further Federal Reserve guidance and ECB caution persists.
Read at londonlovesbusiness.com
Unable to calculate read time
Collection
[
|
...
]