The euro-dollar pair extended its downtrend as market participants await key economic data from both the U.S. and Europe that could shape its near-term trajectory. A cautious mood could follow a volatile week marked by the U.S. elections, with attention now shifting to inflation data and Federal Reserve policy signals.
In the wake of last week's interest rate cut decision, Fed Chair Powell emphasized the Federal Reserve's commitment to data-driven policy decisions, independent of political influence. Should inflation show signs of moderation, the Fed may continue its rate-cut cycle, potentially exerting further pressure on the dollar.
In Europe, preliminary data revealed a 0.4% increase in eurozone GDP for the third quarter, representing the strongest growth rate in two years, with Germany's economy also showing modest expansion.
European yields have declined, as speculation of a potential rate cut by the European Central Bank (ECB) in December has tempered sentiment surrounding the euro.
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