- The Euro ticks h¡igher as the impact of France's debt downgrade eases.
- The US Dollar drifts lower with traders positioning for a "dovish cut" by the Fed.
- The calendar is light on Monday, with only ECB's Schnabel and President Lagarde's public appearances on tap.
The EUR/USD pair trades at 1.1745 during Monday's European session, recovering from a pullback to 1.1720 earlier in the day. The common currency opened the week on a hesitant tone but is gathering momentum as the market shifts its focus from France's political crisis to the US Federal Reserve (Fed) monetary policy meeting due on Wednesday.
On Friday, the Fitch rating agency downgraded France's debt ranking to A+, its lowest level on record, citing its uncertain political situation – President Emmanuelle Macron named Sebastien Lecornu as the third Prime Minister of his term last week –, and a fiscal deficit that is only expected to continue growing.
The impact of Fitch's announcement on the Euro (EUR) has been limited, as the Fed's decision remains front and center in financial markets. Investors have already priced in a 25 basis points cut, but the interest rate projections and Chairman Jerome Powell's press conference are likely to reveal changes in the forward guidance that might determine the US Dollar's near-term direction.
The macroeconomic docket is light on Monday. ECB President Lagarde will take part in a panel at the Institute Montaigne in Paris, and during the European afternoon, Isabel Schnabel will speak at an economic meeting in Luxembourg. Their comments about France's situation and the bank's next monetary policy plans are likely to provide some guidance for the Euro.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.10% | -0.28% | -0.19% | -0.04% | -0.18% | -0.10% | -0.12% | |
| EUR | 0.10% | -0.14% | -0.16% | 0.07% | -0.04% | -0.02% | -0.03% | |
| GBP | 0.28% | 0.14% | 0.08% | 0.21% | 0.10% | 0.12% | 0.00% | |
| JPY | 0.19% | 0.16% | -0.08% | 0.13% | 0.06% | 0.10% | 0.07% | |
| CAD | 0.04% | -0.07% | -0.21% | -0.13% | -0.04% | -0.09% | -0.21% | |
| AUD | 0.18% | 0.04% | -0.10% | -0.06% | 0.04% | 0.02% | -0.02% | |
| NZD | 0.10% | 0.02% | -0.12% | -0.10% | 0.09% | -0.02% | -0.12% | |
| CHF | 0.12% | 0.03% | -0.00% | -0.07% | 0.21% | 0.02% | 0.12% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Daily digest market movers: The US Dollar weakens with markets awaiting the Fed
- The US Dollar is drifting lower, yet with trading volumes at relatively low levels as investors remain wary of placing large USD directional bets ahead of Wednesday's Fed decision. In the absence of first-tier data, some ECB speakers might move the Euro, but the US Dollar is likely to remain at current levels, at least until Tuesday's US Retail Sales release.
- Data released on Friday by the University of Michigan revealed that U.S. consumer sentiment deteriorated well beyond expectations, dropping to a four-month low in September. The survey signaled that higher product prices stemming from tariffs are weighing on consumption, which is likely to dampen economic growth.
- Last week, a rather moderate increase in US consumer prices and an unexpectedly soft US Producer Prices Index (PPI) report, all in all, contributed to setting the conditions for a Fed rate cut this week and probably to a more dovish monetary policy stance going forward.
- In Europe, France's 10-year bond yield has jumped 5 basis points to levels past 3.5%, and the yield of the 30-year bond increased nearly 10 basis points to 4.33%, following the downgrade of its sovereign debt rating. These levels are below the early September highs that triggered a significant Euro reversal, but still are likely to keep EUR bulls in check.
Technical Analysis: EUR/USD is wavering within a bullish channel
EUR/USD bulls were capped at 1.1750, and the pair is pulling back on Monday. Downside attempts, however, are likely to remain limited with investors awaiting the Fed decision, which is likely to maintain the pair trading within current ranges during the first half of the week. Technical indicators are showing a fading bullish momentum.
To the downside, Friday's low at the 1.1700 area and the bottom of the ascending channel, now at 1.1675, are likely to challenge bears in the coming sessions. Below here, the September 11 low near 1.1660 comes into view ahead of the 1.1610-1.1630 area that encloses the lows of September 2,3, and 4.
Upside attempts are expected to find resistance at 1.1750. Further up, the 1.1780-1.1790 area (September 8, July 24 highs) is likely to hold bulls ahead of the channel top, now at 1.1810.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
Related Articles
U.S. September Rate Decision Preview: What It Means for Bitcoin and Could It Spark a New Rally?
Bitcoin’s rally stalls ahead of the Fed meeting — has the bullish momentum already been priced in?
UK July GDP Commentary: Can GBP Break Through Its Current Fluctuation?
After considering multiple factors, given the evident weakness on both sides of this currency pair, we expect the GBP/USD exchange rate to maintain its current fluctuation trend in the short term.
Investing in Specialized Real Estate
TradingKey - Niche assets like data centers, logistics, healthcare, and cold storage thrive on structural drivers, not traditional property cycles Specialized real estate benefits from secular trends like digitalization, demographics, and supply chain innovation
U.S. August CPI Preview: Persistent Rise in Inflation, What Impact on Rate Cuts? And on US Stocks?
TradingKey - On 11 September 2025, the U.S. will publish August CPI data. Consensus forecasts indicate a 0.3% month-over-month increase for both headline CPI and core CPI. As a result, headline CPI year-over-year may climb to 2.9%, up from 2.7%
Fed to Cut Rates: All Asset Prices Up!
TradingKey - The Federal Reserve is almost certain to restart its interest rate cut cycle on 17 September this year. After in-depth research, we have concluded that cryptocurrencies, the broader U.S. stock market, and short-term U.S. Treasury bonds will all go up.
