The euro rose in European trading on Monday against a basket of major currencies, extending its gains for a fourth consecutive session versus the U.S. dollar, supported by continued weakness in the greenback as investors awaited key Senate votes aimed at ending the longest government shutdown in U.S. history.

A slowdown in inflation across Europe during October eased price pressures on European Central Bank policymakers and revived expectations of an interest rate cut in December.

Price Overview

• EUR/USD climbed 0.15% to $1.1579, up from the day’s opening level of $1.1562, after touching an intraday low of $1.1542.

• The euro ended Friday’s session up 0.15% against the dollar, marking its third straight daily gain amid a rebound from three-month lows.

• On a weekly basis, the euro advanced 0.25% against the dollar — its first weekly rise in three weeks — as selling pressure on the European currency eased.

U.S. Dollar

The U.S. Dollar Index slipped 0.1% on Monday, extending losses for a fourth consecutive session and reflecting continued weakness in the greenback against both major and minor peers.

The decline came amid concerns that the Senate might fail to approve a preliminary deal to end the longest government shutdown in U.S. history, with additional votes expected later in the day.

European Interest Rates

• Recent data showed that headline inflation in the eurozone slowed in October in line with expectations, while core inflation held steady — reducing pressure on ECB policymakers.

• Following the release, money markets priced in a higher probability of a 25-basis-point rate cut by the ECB in December, rising from 10% to 25%.

• Investors now await further economic indicators from across Europe, as well as comments from ECB officials, to reassess the outlook for monetary policy.

The Japanese yen weakened in Asian trading on Monday against a basket of major and minor currencies, extending losses for a second consecutive session versus the U.S. dollar, as the greenback gained on optimism surrounding an end to the longest government shutdown in U.S. history.

Japanese Prime Minister Sanae Takaichi announced that her government plans to abandon its current annual fiscal target in favor of a new multi-year spending framework — a move that could pave the way for a new era of expansionary fiscal policy aimed at supporting Japan’s sluggish economy.

Price Overview

• USD/JPY rose 0.4% to ¥154.03, up from Friday’s closing level of ¥153.41, after touching an intraday low of ¥153.40.

• The yen ended Friday down 0.25% against the dollar following weak household spending data.

• For the previous week, the yen gained about 0.4% against the dollar, marking its first weekly rise in three weeks on renewed hopes of a December rate hike by the Bank of Japan.

U.S. Dollar

The U.S. Dollar Index rose 0.2% on Monday, heading for its first gain in four sessions, reflecting renewed strength in the greenback against major and minor peers.

The rebound followed increased optimism that the longest U.S. government shutdown in history could soon end, after the Senate approved the first stage of a bipartisan deal to reopen the federal government with funding measures extending through January.

Sanae Takaichi’s fiscal shift

Takaichi’s remarks at the end of last week sparked wide debate across financial circles after she said the government would replace its annual fiscal balance target with a broader, multi-year spending objective.

The shift signals Tokyo’s move away from its long-standing commitment to achieving a balanced budget by specific annual deadlines — a departure seen as loosening Japan’s traditionally strict fiscal discipline.

Takaichi argued that the annual framework is no longer suitable amid Japan’s multiple economic challenges, including weak growth, slowing industrial output, and rising living costs. She said the new approach would grant greater flexibility in managing fiscal policy over the medium term.

Analysts noted that while the decision could usher in a phase of fiscal expansion to boost growth, it also poses new challenges for the Bank of Japan in coordinating monetary policy with a more accommodative fiscal stance.

Japanese Interest Rates

• Although BOJ Governor Kazuo Ueda recently delivered his strongest signal yet that an interest rate hike could come in December, markets remain skeptical of the central bank’s gradual approach.

• Current market pricing suggests roughly a 50% chance of a 25-basis-point rate hike at the December meeting.

• Investors are awaiting upcoming data on inflation, unemployment, and wage growth in Japan to reassess those expectations.

Democratic promises to lower energy costs helped deliver a comfortable win in last Tuesday’s elections, as several party candidates pledged to freeze utility rates. Democrats also captured seats on Georgia’s Public Service Commission for the first time in nearly two decades — a sharp rebuke to regulators who had approved six electricity rate hikes over the past two years.

As a result, customers of Georgia Power now pay an average of $516 more per year than they did two years ago. But Georgia is not an isolated case: electricity price hikes have become a hot political issue nationwide, with over 60% of Americans saying utility bills are one of their main financial burdens.

After years of relative stability, U.S. electricity prices have surged, adding to the financial strain of millions already struggling with inflation. Since 2021, electricity prices have jumped 36%, an average annual increase of nearly 7% — three times higher than the 12% rise seen between 2009 and 2020.

Yet the surprise, according to the U.S. Energy Information Administration (EIA), is that prices are likely to keep climbing. The agency projects that residential electricity rates will reach 17.7 cents per kilowatt-hour by 2026, up from 16 cents in 2024.

Soaring demand: the core driver behind the rise

Behind these increases lies what the EIA calls a “chaos dynamic” — a sudden and sustained surge in electricity demand.

After nearly 14 years of stagnant consumption growth (from 2008 to 2021, averaging just 0.1% annually), U.S. electricity demand jumped 3% in 2024 — the fifth-largest yearly increase this century.

This spike is largely driven by the rapid expansion of new data centers across regions managed by the Electric Reliability Council of Texas (ERCOT) and the PJM Interconnection system.

A 2023 report by Grid Strategies titled *“The Era of Flat Power Demand Is Over”* noted that U.S. grid planners — from utilities to regional transmission organizations (RTOs) — have nearly doubled their five-year growth forecasts.

For the first time in decades, nationwide electricity demand is expected to rise as much as 15% over the next ten years, fueled by:

* The proliferation of AI-driven data centers

* Electrification of transport and heating

* Expansion of battery manufacturing

* Industrial incentives for semiconductor and advanced technology production

The Electric Power Research Institute (EPRI) estimates that data centers could consume up to 9% of total U.S. electricity by the end of this decade — up from roughly 1.5% today — due to the energy-intensive nature of generative AI.

Heavy reliance on natural gas adds further pressure

Alongside the demand boom, America’s heavy dependence on natural gas for power generation has left it vulnerable to rising energy costs.

Natural gas now accounts for 40% of the nation’s electricity mix. Over the past year, benchmark Henry Hub prices surged about 60% to $4.33 per million British thermal units (MMBtu).

The EIA expects prices to climb further, reaching $4.90 per MMBtu in 2026 versus $4.00 in 2025, driven by robust demand for liquefied natural gas (LNG) exports and slowing domestic production growth.

U.S. LNG export capacity is projected to rise roughly 75% by 2030 based on currently approved projects — from around 17 billion cubic feet per day today to about 30 billion cubic feet per day by the end of the decade.

A coming LNG surplus may ease prices longer-term

Despite short-term price pressures, the rapid expansion of U.S. LNG output could eventually help reduce costs.

TotalEnergies CEO Patrick Pouyanné recently warned of a looming oversupply of U.S. LNG, following NextDecade Corp.’s final investment decision (FID) on Train 4 of its Rio Grande LNG project in Texas — which will bring the facility’s total planned capacity to 48 million tons per year.

Pouyanné said the U.S. is building “too many” liquefaction plants, potentially creating a long-term glut if all projects proceed as scheduled.

Train 4 alone will add about 6 million tons of annual capacity, bringing the total under construction to 24 million tons. NextDecade also said Train 5 is nearing an FID, while Trains 6 through 8 remain in development and permitting stages.

The construction cost of Train 4 is estimated at around $6.7 billion, financed 40% through equity and 60% through debt, with TotalEnergies holding a 10% stake in the project.

Major Wall Street indexes extended losses for a second straight session on Friday, heading for weekly declines as mounting concerns over the economy and stretched valuations in technology stocks weighed on investor sentiment.

The tech-heavy Nasdaq fell nearly 2% on Thursday after top Wall Street executives warned earlier in the week that the market could be approaching a sharp correction.

Both the S&P 500 and Dow Jones Industrial Average appeared on track for their largest weekly losses in four weeks, while the Nasdaq was heading for its worst week since March.

Sam Stovall, chief investment strategist at CFRA Research, said: “There’s a lingering sense of unease about a potential market pullback… This is typical seasonal weakness in early November, fueled by high valuations and a lack of fresh catalysts to lift markets higher.”

The AI-driven rally that propelled equities to record highs this year has started to fade, as doubts grow over the tech sector’s ability to generate sustainable profits from artificial intelligence, and as intra-sector spending cycles drain enthusiasm for US stocks.

Tech shares led the decline, with Nvidia falling 2.8% and Broadcom sliding 2.2%. Both the information technology sector and the semiconductor index were on pace for their steepest weekly losses in seven months.

At 10:01 a.m. Eastern Time, the Dow Jones Industrial Average dropped 138.50 points, or 0.30%, to 46,773.80. The S&P 500 lost 46.63 points (0.69%) to 6,673.69, while the Nasdaq Composite fell 278.31 points (1.21%) to 22,775.68.

The CBOE Volatility Index (VIX) — known as Wall Street’s “fear gauge” — climbed to its highest level in over two weeks.

Meanwhile, Tesla shareholders approved the largest compensation package in history for CEO Elon Musk, though Tesla shares fell 3.3% amid the broader market selloff, putting additional pressure on the consumer discretionary sector.

Earnings data from LSEG showed that, as of Thursday, 83% of the 424 S&P 500 companies that had reported results beat Wall Street expectations — the highest rate of positive surprises since the second quarter of 2021.

Expedia shares surged 16%, leading the S&P 500, after the company raised its full-year revenue growth forecast and posted stronger-than-expected quarterly earnings.

**Economic concerns persist**

The longest government shutdown in US history has created a major data void at a time when Federal Reserve policymakers remain divided over the future of interest rates, while private-sector indicators continue to paint a mixed picture of the economy.

Kevin Hassett, White House economic adviser, told Fox Business that the economic impact of the shutdown had been “far worse than expected.”

Separately, the preliminary reading of the University of Michigan’s consumer sentiment index dropped to 50.3 this month, below analysts’ estimates of 53.2, according to a Reuters poll.

Stovall added: “The question now is whether this shutdown will deepen the slowdown in the US economy. There’s a high degree of uncertainty — it’s not just the Fed flying blind, but also the American consumer and investor.”

Elsewhere, shares of Block fell 10.5% after the company missed quarterly profit expectations, while Take-Two Interactive slid 6.6% following news that the release of *Grand Theft Auto VI* had been delayed to November 2026.

On the NYSE, declining issues outnumbered advancers by a ratio of 1.29 to 1, while on the Nasdaq the ratio stood at 1.99 to 1.

The S&P 500 recorded eight new 52-week highs and ten new lows, while the Nasdaq Composite posted 18 new highs and 211 new lows.