Daily currency update
Since the US presidential election, the dollar has climbed over 2% in November against a basket of currencies, driven by expectations that Trump’s proposed policies could boost inflation and reduce the need for significant Federal Reserve rate cuts.
However, the dollar’s rally paused this morning as traders awaited more clarity on President-elect Donald Trump’s policy plans and reassessed the likelihood of a less aggressive stance from the Fed.
Uncertainty has also grown around whether the Federal Reserve will move forward with a rate cut next month, adding further caution to market sentiment.
Key movers
In Europe, ECB’s Stournaras highlighted that the central bank’s monetary policy has effectively curbed inflation, projecting it to align with the 2% target by early 2025. He stressed the importance of avoiding an inflation undershoot as economic conditions shift. While interest rates are expected to remain restrictive for an extended period, Stournaras pointed to persistent downside risks to Eurozone growth as a key concern.
Expected ranges
GBP/USD: 1.2585 – 1.2675 ↓
GBP/EUR: 1.1955 – 1.2035 ↑
EUR/USD: 1.0485 – 1.0565 ↓
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