The Euro (EUR) accelerates its gains vs. the US Dollar (USD) at the end of the week, encouraging EUR/USD to approach once again to the key hurdle at 1.0600 the figure at the end of the week.
In the meantime, the Greenback now comes under some tepid selling pressure and revisits the 106.40 zone when measured by the USD Index (DXY). The so-far daily downtick in the Dollar comes in tandem with the broad-based absence of direction in US yields across different maturities.
In the realm of monetary policy, a growing consensus has formed amongst market participants that the Federal Reserve (Fed) will preserve its present stance of retaining interest rates unchanged at the meeting on November 1. The door remains open, however, to a potential rate hike in December, a view that appears well propped up by the resilience of the US economy and still elevated inflation.
Back to the European Central Bank (ECB), there were no surprises at its event on Thursday following a unanimous hold. President Christine Lagarde reiterated once again that there is still job to be done regarding inflation, while it is expected that inflation will remain too high for too long. Adding a bearish tone to the meeting, Lagarde acknowledged that risks to the economic outlook appear tilted to the downside.
On the domestic calendar, the ECB released its Survey of Professional Forecasters (SPF) and now sees inflation tracked by HICP at 2.7% in 2024 and 2.1% in 2025. Regarding the economic activity, the survey sees real GDP growth at 0.9% and 1.5% for the next year and 2025, respectively.
In the US, inflation figures tracked by the Personal Consumption Expenditures (PCE) Price Index rose 3.4% YoY in September and 3.7% YoY when it comes to the Core PCE. In addition, Personal Income rose 0.3% MoM during last month, Personal Spending gained 0.7% MoM and the final Michigan Consumer Sentiment Index improved to 63.8 for October.