Euro Slightly Up on ECB-Fed Policy Divergence

2025-11-06 16:02 By Joana Ferreira 1 min. read

The euro traded above the $1.15 mark, attempting to recover from a three-month low as investors weighed diverging policy outlooks between the European Central Bank and the US Federal Reserve.

The ECB is expected to keep rates unchanged for some time, with money markets now pricing only a 45% chance of a rate cut by September 2026, down sharply from over 80% in October.

Meanwhile, several ECB officials struck a cautious tone: François Villeroy de Galhau said the central bank must keep policy options open, Joachim Nagel urged vigilance on inflation, and Vice President Luis de Guindos noted any dip below 2% inflation would likely be temporary.

Across the Atlantic, the US dollar came under pressure after Challenger data revealed layoffs surged to a 20-year high for October, reigniting bets on a near-term Fed rate cut and offsetting the previous day’s stronger ADP and ISM readings.



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