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EUR/USD
Source: Newsmaker.id
The euro climbed back above US$1.12 in trading on Monday (Nov 2), following a dip to a 17-month low. This strengthening occurred against a backdrop of falling oil prices and uncertainty surrounding the US midterm elections—set for Tuesday—which weighed on the US dollar.
The decline in oil prices was triggered by reports that US President Donald Trump is willing to allow more time for diplomatic efforts with Iran, rather than considering new military action immediately following the elections. These developments helped ease some of the pressure on the dollar, providing room for the euro to recover.
However, the euro’s gains remain tempered by fiscal concerns in France. Fitch Ratings recently revised its outlook for France to "negative" during an unscheduled review—a factor that has served to limit the recovery of the European single currency.
Meanwhile, the European Central Bank (ECB) kept interest rates unchanged on Thursday, offering no clear guidance on the future direction of its policy. ECB President Christine Lagarde confirmed that the possibility of a rate hike had been discussed, but policymakers ultimately reached a consensus to maintain current borrowing costs.
The ECB noted that tightening financial conditions are helping to curb inflationary pressures. Consequently, the market is now closely watching how the central bank will balance inflation risks against economic growth prospects within the eurozone.
The euro’s future trajectory will be heavily influenced by the direction of the US dollar, fluctuations in oil prices, and the outcome of the US midterm elections. Should political uncertainty in the US intensify and the dollar face further pressure, the euro may well sustain its recovery from its 17-month low. (arl)
Source: Newsmaker.id