"On the U.S. side, the Federal Reserve continues to maintain a cautious, data-dependent stance. Although the unemployment rate has risen to 4.6%, initial jobless claims remain very low (199k), indicating that the U.S. labour market continues to demonstrate resilience. At the same time, inflation (2.7%) - while easing from its peak - has yet to return sustainably to the Fed's target range."
"By contrast, the European Central Bank is pursuing a policy-stability strategy with a high degree of flexibility. According to ECB communications and economic reports, inflation in the Eurozone is declining more slowly than expected, while economic growth - although weak - has so far avoided a deep recession. Eurostat data show that annual inflation in the euro area stood at 2.1% in November 2025, down from 2.2% in the previous month and close to the ECB's medium-term target."
EUR/USD currently lacks clear directional momentum as monetary policy, economic data, and geopolitical developments jointly influence investor expectations. The primary driver is the divergence in monetary policy expectations between the United States and the Eurozone. The Federal Reserve remains cautious and data-dependent: unemployment has risen to 4.6%, initial jobless claims are very low (199k), and inflation sits at 2.7%, delaying expectations for rate cuts into 2026. The European Central Bank emphasizes policy stability with flexibility as Eurozone inflation eased to 2.1% in November 2025 and forecasts project around 1.9% in 2026. The euro has avoided heavy selling but lacks decisive upside momentum.
Read at London Business News | Londonlovesbusiness.com
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