Euro trades near six-month low ahead of major European data

Euro fell in European trade on Friday against a basket of major rivals, extending losses for the fourth straight session against US dollar and almost touching six-month lows amid growing concerns about the widening Europe-US policy gap. 

Later, important European data will be released for September, and will provide important clues on the health of the euro zone economy. 

EUR/USD fell 0.2% to 1.0640, with a session-high at 1.0663, after losing 0.1% yesterday, the third loss in a row, plumbing a six-month trough at 1.0617 following a spate of US data.

Interest Rate Gap

The current interest rate gap between Europe and the US shrank to just 100 basis points, the lowest since May 2022, however it could rise again to 125 basis points in November. 

Analysts now expect the European Central Bank to pause raising rates in November after effectively reaching neutral levels in September.

However, the Federal Reserve is expected to raise interest rates by 25 basis points at the November meeting after pausing rate hikes at the September meeting. 

Major Sectors

Now investors await a slew of important European data for September on the manufacturing and services sectors, which will impact euro's standing considerably.