Euro Under Pressure; German Inflation Data in Focus

The euro remains under pressure against the US dollar in Asian trading on Wednesday (November 11, 2026), following a sharp decline in the previous session. The EUR/USD pair is holding steady around the 1.1150 level, reflecting investor caution amid a strengthening US dollar. Pressure on the euro intensified after US consumer inflation data came in higher than anticipated, fueling expectations that the Federal Reserve (the Fed) might raise interest rates again in December.

The US Consumer Price Index (CPI) for October rose by 0.4% month-on-month—a slowdown from the 0.6% recorded in September, yet still exceeding the market forecast of 0.3%. Meanwhile, core CPI—which excludes volatile food and energy prices—increased by 0.3%, surpassing the 0.2% expectation and matching the previous month’s figure. These results indicate that inflationary pressures persist, even as the rise in energy prices begins to ease. Consequently, investors are now weighing the possibility of tighter monetary policy to bring US inflation under control.

Expectations for a Fed rate hike have strengthened following hawkish remarks from several central bank officials. Fed Governor Christopher Waller suggested that a 0.3% rise in core inflation could justify considering a 50-basis-point interest rate hike at the December 8–9 meeting. Philadelphia Fed President Anna Paulson emphasized the necessity of maintaining a restrictive monetary policy to steer inflation back toward the 2% target, while Dallas Fed President Lorie Logan noted that interest rate hikes might need to be implemented at a faster pace. These combined statements have bolstered the US dollar, limiting any potential for the euro to strengthen. Nevertheless, the weakening of the euro has been tempered by growing hopes for a diplomatic resolution to the conflict between the United States and Iran. Easing tensions in the Middle East could reduce investor demand for the U.S. dollar—often sought as a "safe-haven" asset—while also helping to lower energy prices, which have recently weighed on the European economy. Meanwhile, market attention is focused on Germany’s consumer inflation report and upcoming statements from European Central Bank (ECB) officials. These data points and comments will provide insight into inflationary pressures within the Eurozone and the likely trajectory of the ECB’s interest rate policy in the coming months.

The movement of the EUR/USD pair around the 1.1150 level indicates that the euro remains under pressure from a strengthening U.S. dollar, following U.S. inflation figures that exceeded expectations. The prospect of more aggressive interest rate hikes by the Federal Reserve is a primary factor limiting any recovery for the pair. However, hopes for U.S.-Iran diplomacy and the possibility of the ECB maintaining a hawkish stance could provide support for the euro. If German inflation data reveals significant price pressures and the ECB reinforces signals of monetary tightening, the EUR/USD pair could potentially recover toward the 1.1200 area. Conversely, if the dollar continues to strengthen—driven by heightened expectations of Fed rate hikes—the pair may retest support levels near 1.1100. Ultimately, the short-term direction of the euro remains contingent upon developments regarding inflation and the monetary policies of both central banks.