The euro fell in the European market on Monday against a basket of major currencies, extending losses for the second consecutive day against the U.S. dollar and moving away from a two-week high, as corrective moves and profit-taking continued alongside a rebound in the U.S. currency supported by Federal Reserve officials.

Expectations for a European rate cut in December remain weak, despite some easing in inflationary pressures on European Central Bank policymakers, especially after recent data showed that inflation slowed in October.

Price Overview

The euro fell 0.25% against the dollar to 1.1595 dollars, from today’s opening level of 1.1623 dollars, and recorded a high of 1.1624 dollars.

The euro ended Friday’s session down 0.1% against the dollar, marking its first decline in four days, after hitting a two-week high the previous day at 1.1656 dollars.

The euro posted a 0.5% gain against the dollar last week, its second straight weekly rise, driven by concerns over a U.S. economic slowdown amid the longest federal government shutdown.

U.S. Dollar

The U.S. dollar index rose 0.2% on Monday, extending gains for the second straight session, as the currency continued to recover from two-week lows, reflecting ongoing strength against major and minor peers.

Recent comments from several Federal Reserve officials were more hawkish than markets expected, pushing down the probability of a U.S. rate cut in December to around 40%, compared with a steady 95% a month ago.

European Interest Rates

Money-market pricing for a 25-basis-point European Central Bank rate cut in December is currently stable around 25%.

To reassess those expectations, investors are awaiting several economic releases in Europe, in addition to monitoring comments from ECB officials.

The Japanese yen fell in the Asian market on Monday against a basket of major currencies, extending losses for the second straight day against the U.S. dollar and moving closer to touching a nine-month low, after data showed that Japan’s economy contracted in the third quarter of this year due to U.S. tariffs.

The data reinforces Prime Minister Sanae Takaichi’s inclination to use expansionary fiscal policies to support the country’s weak economic activity, reducing the likelihood of a Japanese interest-rate hike in December.

Price Overview

The dollar rose about 0.2% against the yen to 154.79¥, from today’s opening level of 154.52¥, and recorded a low of 154.37¥.

The yen ended Friday’s session down by less than 0.1% against the dollar, resuming losses that had paused the previous day in an attempt to recover from a nine-month low at 155.04.

The yen lost about 0.75% against the dollar last week, marking its third weekly decline in a month amid negative pressure following recent remarks by Prime Minister Sanae Takaichi.

Japan’s Economy

Preliminary GDP data showed that Japan’s economy contracted by 0.4% in the third quarter of this year, better than market expectations of a 0.6% contraction, after recording 0.5% growth in the second quarter.

This marks the first contraction in six quarters, driven by the hit to Japanese exports from U.S. tariffs, further strengthening Takaichi’s stance toward using fiscal stimulus to support the country’s weak economic activity.

Takaichi announced last week that she would work on drafting a new multi-year fiscal target to allow more flexibility in spending, a shift that could weaken Japan’s commitment to consolidating its public finances.

She also renewed calls for the Bank of Japan to exercise caution and slow the pace of rate hikes, stressing the need to balance supporting economic growth with maintaining price stability.

Analysts believe Takaichi’s remarks may pave the way for a new phase of expansionary fiscal policy to support growth, but they also place additional pressure on the Bank of Japan as it faces challenges in coordinating monetary policy with a less restrictive fiscal stance.

Japanese Interest Rates

Following the above data, market pricing for a 25-basis-point rate hike by the Bank of Japan in the December meeting dropped from 45% to 35%.

To reassess those expectations, investors are awaiting further data on inflation, unemployment, and wage levels in Japan.

Most cryptocurrencies fell during Friday’s trading, led by Bitcoin, which has officially entered bear-market territory following heavy selling and uncertainty over U.S. monetary policy.

Bitcoin reached 94,491.22 dollars earlier today, leaving the digital asset down more than 23% from its last record high in early October at 126,000 dollars, thereby entering a bear market.

According to data compiled by Bloomberg, U.S.-listed exchange-traded funds investing in Bitcoin saw net outflows of about 870 million dollars on Thursday, signaling waning institutional confidence.

Speculation and uncertainty surrounding Federal Reserve policy returned to the forefront as concerns grew over the expected size of the rate cut at the upcoming December meeting.

According to the CME FedWatch tool, the probability of a 25-basis-point rate cut in December declined to 53.6% from 94.4% a month ago, while the probability of no change rose to 46.4% from 5.5%.

In the same context, Jeffrey Schmid, president of the Kansas City Federal Reserve Bank, said Friday that his concerns about inflation—describing it as “far too hot”—far outweigh the narrower effects of tariffs, in new remarks suggesting he may oppose cuts again at the December meeting if policymakers decide to lower short-term borrowing costs.

Early Thursday morning, the U.S. House of Representatives voted in favor of the temporary funding bill, which was then signed by President Donald Trump, immediately ending the government shutdown that had lasted from early October until Wednesday.

Ethereum

In market trading, Ethereum rose 0.2% to 3,205.8 dollars on CoinMarketCap as of 20:00 GMT.

Bitcoin

Bitcoin fell by nearly 3% to 95,700 dollars.

The United Nations’ annual climate conference, COP30, began on Monday in Brazil, marked by the notable absence of the United States. In an unprecedented political move, Washington sent no high-level representation to the conference, which is considered the largest and most important international event of its kind. The absence comes after the Trump administration’s decision to withdraw from the Paris climate agreement. And as the world’s largest economy pulls back from decarbonization and clean-energy initiatives, the rest of the world continues advancing at a rapid pace.

Many experts believe that the U.S. shift away from expanding clean-energy projects opens the door for competitors—chief among them China.

Although Chinese President Xi Jinping will not attend COP30, China’s presence and influence will be strong. A report by Semafor stated that “the summit will highlight the scale of progress China’s clean-tech industry has made in Latin America,” adding that “Brazil has chosen Chinese electric vehicles to transport participants, signaling that the world is moving forward even without American political and technological leadership.”

This assessment appears accurate. Globally, the world continues to achieve historic gains in deploying renewable energy and expanding electrification efforts, as renewables this year surpassed coal as the largest source of electricity generation worldwide in a historic milestone. China alone has added 300 gigawatts of solar and wind capacity since the start of the year—nearly five times the United Kingdom’s entire renewable capacity.

And it is not limited to China, Europe, and wealthy nations. A growing number of developing countries—across South America, Africa, Southeast Asia, and the Middle East—are now among the fastest-growing adopters of clean energy.

This is driven by the changing economics of renewables, especially the falling cost and large-scale availability of solar technologies. Thanks to a flood of cheap Chinese-made solar panels and wind-turbine components, countries like Brazil, Chile, El Salvador, Morocco, Kenya, and Namibia have surpassed the United States in their clean-energy trajectories. According to Yale Environment 360 estimates, about 63% of emerging-market energy systems in Africa, Asia, and Latin America rely on solar power for electricity generation to a greater extent than the United States.

CNN notes that “some countries are undergoing rapid and striking energy transitions, adding solar power at a pace that has made it a major source of electricity within just a few years—not decades.” A standout example is Pakistan, which has become “one of the largest new adopters of solar energy” in an exceptionally short period.

Jan Rosenow, head of the energy program at Oxford University’s Environmental Change Institute, told NPR this year: “We have never seen solar deployed at this scale and within such a short timeframe anywhere in the world.”

This massive shift would not have been possible without the steep decline in wind and solar technology costs—and that decline would not have occurred without China’s large-scale manufacturing. Lars Nitter Havro, head of macro energy research at Rystad Energy, told CNN: “The world is now reaping the benefits of this expansion, enabling emerging economies to seize the opportunity and leap into the new energy era.”

China’s large-scale and cost-effective clean-energy manufacturing has strengthened its near-total dominance over global clean-energy supply chains and expanded its influence in emerging economies worldwide. It also remains the single factor keeping decarbonization achievable for many countries after other transition-finance plans—including unfulfilled climate-finance pledges—failed to deliver.