EUR/USD Holds Slightly Higher, Dollar Sentiment Makes Euro's Recovery Difficult
EUR/USD remained unable to shake off pressure on Thursday, holding below the 1.1640 area and hovering around 1.1635. The pair also remained close to its one-month low of 1.1618, despite better-than-expected factory activity data in Europe.
A Eurostat release showed Eurozone Industrial Production rose 0.7% (m/m) in November—stronger than market expectations of 0.5%. Annually, industrial output also strengthened to 2.5% (y/y), up from 2.0% in October and exceeding the consensus forecast.
However, the positive impetus from European data was not enough to change the euro's overall direction. From a broader perspective, the single currency continued its weakening trend since its late-December peak, primarily because relatively solid US data kept the dollar in demand.
The day before, US data showed producer prices rising faster than expected and retail sales rebounding strongly in November. This combination of data reinforces the view that the Fed has reason to hold interest rates in the coming months—a factor that generally supports the dollar.
Sentiment also improved after US President Donald Trump announced that he had no plans to remove Fed Chairman Jerome Powell, despite the ongoing criminal investigation. This statement helped ease market concerns about the Fed's independence, which had weighed on the dollar earlier in the week.
Next, market participants await a series of US manufacturing indicators, such as the NY Empire State and Philadelphia Fed, which could provide further confirmation of the strength of the US economy in the final quarter of 2025—and provide fuel for the dollar's direction ahead of comments from Fed officials. (alg)
Source: Newsmaker.id
