Euro trades near three-week trough on cautious remarks

Economies.com
2023-12-05 07:40AM UTC

Euro fell in European trade on Tuesday against a basket of major rivals, extending losses for the fifth straight session against the dollar and hovering near three-week lows following cautious remarks by ECB officials.

 

Such remarks bolstered the case of early interest rate cuts by the European Central Bank in 2024, which could widen the interest rate gap with the US Federal Reserve. 

 

EUR/USD

 

EUR/USD fell 0.15% today to 1.0820, with a session-high at 1.0848, after losing 0.4% on Monday, the fourth loss in a row, plumbing a three-week trough at 1.0804 as ECB officials welcome recent inflation data. 

 

Euro zone consumer prices rose 2.4% in November, the lowest rate in 28 months, and very close to the 2% target.

 

Cautious Remarks 

 

European Central Bank member Isabel Schnabel said on Tuesday that more interest rate hikes in the euro zone "are unlikely", following the inflation data in November. 

 

She said the data shows that inflation is losing steam but without the risk of long-term recession with it. 

 

She believes that inflation is going in the right tract but there's need for progress in other major sectors. 

 

She believes the current level of interest rates is tight enough to bring inflation to 2% by 2025. 

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