The EUR/USD pair drifted slightly lower during Thursday’s European session, currently trading around 1.1590, down from the previous day’s high of 1.1620. The Euro remains subdued as the US Dollar gains some strength amid renewed concerns over trade tensions between the US and China.
Recent reports that the US is considering restrictions on software exports to China have reignited fears of a potential trade war. However, market reaction has been relatively muted, as investors remain hopeful that a planned meeting between US President Donald Trump and Chinese President Xi Jinping will lead to an extension of the current trade truce.
In the US, with limited major economic data due to the government shutdown, trade-related news continues to dominate market sentiment. Meanwhile, traders await the release of Eurozone Consumer Confidence figures, which could provide fresh direction for the Euro.
Key Events and Economic Data to Watch
Today’s economic calendar includes a speech from European Central Bank (ECB) Executive Board member Philip Lane and the preliminary Eurozone Consumer Confidence report. In the US, attention will be on the Chicago and Kansas Federal Reserve National Activity Indexes, along with speeches from Fed governors Michelle Bowman and Michael Barr, which could influence the US Dollar’s trajectory.
Currency Performance Snapshot
Among major currencies, the Euro showed relative strength against the Japanese Yen today but weakened slightly against the US Dollar. Below is a summary of percentage changes for key currencies:
| Currency | USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF |
|---|---|---|---|---|---|---|---|---|
| USD | — | +0.19% | +0.15% | +0.49% | 0.00% | -0.22% | -0.07% | +0.27% |
| EUR | -0.19% | — | -0.04% | +0.32% | -0.18% | -0.41% | -0.26% | +0.13% |
| GBP | -0.15% | +0.04% | — | +0.35% | -0.14% | -0.37% | -0.22% | +0.12% |
| JPY | -0.49% | -0.32% | -0.35% | — | -0.50% | -0.71% | -0.58% | -0.22% |
| CAD | 0.00% | +0.18% | +0.14% | +0.50% | — | -0.21% | -0.07% | +0.27% |
| AUD | +0.22% | +0.41% | +0.37% | +0.71% | +0.21% | — | +0.15% | +0.52% |
| NZD | +0.07% | +0.26% | +0.22% | +0.58% | +0.07% | -0.15% | — | +0.35% |
| CHF | -0.27% | -0.13% | -0.12% | +0.22% | -0.27% | -0.52% | -0.35% | — |
US Dollar Gains as Trade Tensions Resurface
The US Dollar has regained some momentum after the White House indicated potential restrictions on a range of software exports to China, in response to China’s decision to limit rare earth exports.
However, US Treasury Secretary Scott Bessent reassured markets that negotiations with China are ongoing with “good intentions” and “great respect.” President Trump also sought to ease concerns by downplaying the impact of China’s export restrictions and expressing optimism about progress on several issues including soybean trade and a ceasefire in Ukraine.
ECB Comments and Upcoming Inflation Data
In Europe, ECB Vice President Luis de Guindos commented that inflation risks remain balanced, pointing to positive consumer price developments and affirming that current interest rates are appropriate.
Looking ahead, the focus shifts to the release of the US Consumer Price Index (CPI) on Friday. Analysts expect headline inflation to rise slightly to 3.1% year-on-year from 2.9% in August, with core inflation steady at 3.1%. These numbers are not expected to significantly change market expectations of a Federal Reserve interest rate cut in October.
Technical Outlook: EUR/USD Near Support
Technically, EUR/USD is holding a bearish bias. The pair faced resistance at 1.1620 and is now hovering just above key support near 1.1580. Momentum indicators such as the RSI remain below 50, indicating downward pressure, while the MACD stays below its signal line.
If the 1.1580 support breaks, the next targets lie near October lows around 1.1545 and further down near the channel bottom at approximately 1.1455. On the upside, resistance levels to watch are 1.1620 (recent high), the descending channel top around 1.1625, followed by the October 21 high near 1.1650 and the October 17 high at 1.1728.
Upcoming Economic Events
- ECB’s Philip Lane Speech: The ECB Chief Economist and Executive Board member will speak today, offering insights into the European economy and monetary policy.
- Eurozone Consumer Confidence: A key indicator of economic sentiment, with higher confidence suggesting economic growth and supporting the Euro. The consensus forecast is around -15, slightly lower than the previous -14.9.
- Fed’s Michelle Bowman Speech: The Federal Reserve Vice Chair for Supervision will address market participants, possibly shedding light on the Fed’s outlook.
Stay tuned as these events unfold and shape the direction of the EUR/USD and broader currency markets.