- EUR/USD fell slightly ahead of important economic data from the Eurozone and Germany.
- Increasing uncertainty surrounding the US presidential election could cause the risk-sensitive euro to weaken further.
- Traders will shift their focus to US gross domestic product (GDP) and ADP employment change data later in the day.
EUR/USD fell after two days of gains and was trading around 1.0810 in Asian time on Wednesday. The European Central Bank (ECB) is widely expected to cut deposit scheme rates again, putting downward pressure on the euro. Money markets are currently pricing in a nearly 50% chance of a 50 basis point rate cut at the December meeting.
Investors will be keeping an eye on Wednesday's preliminary gross domestic product (GDP) figures for Germany and the euro area, as well as preliminary German harmonized consumer price index (HICP) figures. The focus will now turn to preliminary US third-quarter gross domestic product (GDP) figures to be released on Wednesday and ADP employment changes for October.
ECB policymakers have recently expressed a variety of views on monetary policy. Belgian National Bank Governor Pierre Wunche said there was no immediate need for the central bank to cut rates more quickly, suggesting the central bank could respond with more moderate rates. In contrast, Bank of Portugal Governor Mario Centeno insisted on considering a 50 basis point rate cut as a viable option in December.
The downside factor for the EUR/USD pair may also be due to the rise in the US dollar (USD) against the backdrop of an improvement in US bond yields. The U.S. Dollar Index (DXY), which measures the value of the U.S. dollar against six other major currencies, is trading around 104.30, with yields on two-year and 10-year U.S. Treasuries at 4.09% and 4.24%, respectively. . writing time.
As uncertainty surrounding the US presidential election continues, the risk-sensitive EUR/USD pair could fall further. The three-day Reuters/Ipsos poll, which ended on Sunday and was released on Tuesday, showed the race to be nearly even as the Nov. 5 election approaches.
Vice President Kamala Harris, the Democratic candidate, had an approval rating of 44%, compared to 43% for Trump, narrowing the gap to Republican candidate Donald Trump to just 1 point.
economic indicators
Gross Domestic Product (YoY)
Gross domestic product (GDP), published quarterly by Eurostat, is a measure of the total value of all goods and services produced in the euro area over a given period. GDP and its key aggregates are one of the most important indicators of the health of the economy. The YoY measure compares economic activity in a reference quarter to the same period a year ago. Generally, an increase in this indicator is bullish for the euro (EUR), while a low value is considered bearish.
read more.
Next release: Wednesday, October 30, 2024 10:00 (Prel)
frequency: quarterly
consensus: 0.8%
Previous: 0.6%
sauce: eurostat
