Euro weakens against the US Dollar

Daily Currency Update

The Euro remains cautious against the US Dollar on Thursday. The US 10-year Treasury yield reaches a 16-year peak. Investors feel the Federal Reserve will hold rates higher for longer in the light of a resilient US economy and with the outlook of bringing inflation back to target. Combined with the risk of war escalations between Hamas and Israel, continues to keep the safe haven US Dollar supported.

The hopeful US Retail Sales figures released on Tuesday suggested that the economy ended the third quarter strong and lifts the Q3 GDP estimates. On Wednesday the US housing market showed mixed results on Wednesday. Building Permits dropped to 1.475M in September, higher than the expected 1.45M. Whereas housing starts rose to 1.35M, below the expected 1.38M.

Investors might feel the European Central Bank could pause its tightening cycle until Q3 of 2024. The currency pair trades around the 1.05 during the Asian session on Thursday. The Harmonized Index of Consumer Prices in the Eurozone released came in at 0.3% in September. European Central Bank President Christine Lagarde commented, saying that underlying inflation remains strong and wage growth remains historically high.