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EUR/USD: Euro Stands at $1.05 as Forex Dealers Countdown Fed’s December Cut

Key points:

• Euro is only managing a standstill in the foreign exchange market.

• Share failure comes close to a dollar and five cents.

• Euro down 6.5% from 2024 peak

Scheduled for Wednesday is the Fed’s rate decision that may further affect the dollar’s valuation; traders are already proceeding with this idea.

• The EURUSD trend is fluctuating slightly around the $1.05 level as sceptical Forex players prepare for the turbulence before and after the decision of the Federal Reserve on interest rates. The euro peaked at $1.0530 on Tuesday and then began a descent that brought it back to the vicinity of the milestone mark in two straight advances. But that two-day increase is modest in the grand scheme where the US dollar has practically devalued the euro.
• There is another potentially large test coming next Wednesday with the Fed’s expected 25 basis point cut in interest rates. The cut is as part of an unparalleled bid to ease monetary conditions to bring down interest rates and foster economic growth while retaining inflationary pressures as an ideal. However, data from recent months on inflation point to brewing pressures and that may complicate what should otherwise be an easy call to cut the benchmark interest rate.
• After getting as high as $ 1.12 in September 2024, the euro has been washed out more than 6.5 percent of its valuation against the more soニック greenback. Apparently, lower rates are not sufficient to stop the dollar bulls — basically, when costs to borrow money rise, the local currency is less attractive because it pays a lower interest rate on deposits. But not this time. That is what I meant earlier when I said there is another factor that has supported the upside narrative for the dollar and the factor must be named.
• Donald Trump the president-elect of the United States had promised to do everything possible to accelerate the growth of the US economy & to make the dollar remain the world’s preferred forex choice. This dollass-first, pro-growth framework involves the following policies: deregulation so that US businesses are kick-started and taxes lowered so the same businesses grow and enlarge. Moreover, steep tariffs that the countries place on the imports from US pose a danger to the ability of other economies to conduct business with the US hence may lead to the cost of the buck.