EUR/USD Under Pressure; GDP and PCE Data to Be Decisive

During the European trading session on Thursday (October 29), the EUR/USD pair weakened, falling below 1.1150 and approaching its lowest level since May 2025. The euro remains under significant pressure as the US dollar regains strength following a post-FOMC correction, while investors await key US economic data.

Primary attention is focused on US third-quarter GDP and PCE figures, which will provide clues regarding the Federal Reserve's future policy direction. Data coming in stronger than expected could bolster the dollar and exert further downward pressure on the EUR/USD pair.

Meanwhile, the European Central Bank (ECB) is expected to keep interest rates unchanged. Investors, however, will be closely monitoring statements from Christine Lagarde for any signals regarding a potential rate hike in December.

The euro is also facing pressure from concerns over France’s fiscal situation and political gridlock ahead of next year's elections. At the same time, the probability of a Federal Reserve rate hike in December remains around 80%, sustaining the dollar's appeal.

Given these conditions, the EUR/USD pair faces continued downside risk in the near term. Its future trajectory will depend heavily on the combination of GDP and PCE data, as well as communications from the ECB—all of which could shift market expectations regarding the divergence in monetary policy between the US and Europe. (srh)