"EURUSD continues to maintain its recovery momentum as the USD weakens after expectations that the Fed will begin its rate-cutting cycle are reinforced, while the macro environment in Europe shows signs of stabilizing but remains far from solid. The current movement reflects a recalibration of interest-rate and growth expectations between the two economies, rather than a shift clearly favouring the Euro. According to Eurostat, annual HICP inflation in the Eurozone is moving closer to the ECB's 2% target (October inflation at 2.1%)."
"In its Spring 2025 Forecast, the European Commission estimates that real GDP in the Eurozone will grow by only around 0.9% in 2025, before inching up to about 1.4% in 2026, indicating a relatively modest recovery trajectory. Business activity has shown signs of improvement in survey data as the HCOB Eurozone Composite PMI rose to 52.8 in November 2025 from 52.5 in October, marking the highest level in 30 months and the sixth consecutive month above the 50-point threshold,"
EURUSD is recovering as the US dollar weakens on heightened expectations that the Federal Reserve will begin cutting rates. The movement reflects a recalibration of interest-rate and growth expectations between the US and Eurozone rather than decisive euro strength. Eurozone HICP inflation moved closer to the ECB's 2% target (October at 2.1%), aided by falling energy prices while services and wages remain dominant inflation drivers. The European Commission forecasts modest GDP growth of about 0.9% in 2025 and 1.4% in 2026. Business surveys show improving activity (HCOB Composite PMI 52.8 in November 2025), driven by services while manufacturing remains weak. The ECB has cut rates significantly and now follows a cautious, data-dependent stance with deposit, main refinancing, and marginal lending rates at 2.00%, 2.15%, and 2.40% respectively (effective June 11, 2025).
Read at London Business News | Londonlovesbusiness.com
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