NEW YORK / LONDON (IT BOLTWISE) – The euro was stable in US trading, despite the latest inflation data from the US. Consumer prices rose less than expected in September, reinforcing expectations of a rate cut by the Federal Reserve. Experts see the current development as an indication of possible further monetary easing.
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The euro performed well in US trading on Friday and was last quoted at $1.1627. The European Central Bank had previously set the reference rate at $1.1612, which represents a slight increase compared to the previous day. This stability of the euro comes despite the latest inflation data from the USA, which was less strong than many experts expected.
In the US, consumer prices rose 3.0 percent year-on-year in September, compared to forecasts for an increase of 3.1 percent. In August the inflation rate was still 2.9 percent. This data was released late due to a partial government shutdown, which increased uncertainty in the markets.
Expectations that the US Federal Reserve could cut interest rates next week were strengthened by this inflation data. Thomas Gitzel, chief economist at VP Bank, expressed confidence that a rate cut next week was almost certain. He also expects further easing of monetary policy in December if the trend continues.
The effects of US interest rate policy on the euro are complex. On the one hand, an interest rate cut in the US could weaken the dollar, making the euro more attractive in comparison. On the other hand, it remains to be seen how trade tariffs and other economic policy measures will affect inflation and economic growth.
The European Central Bank also faces the challenge of navigating its monetary policy in an environment of global uncertainty. While inflation in the Eurozone remains below target, external factors such as the US-China trade conflict and Brexit developments could influence the economic situation.
Overall, the situation on the foreign exchange markets remains volatile and market participants are closely watching the monetary policy decisions of the major central banks. The coming weeks could be crucial for the further development of exchange rates and the stability of global financial markets.
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