US Dollar Stays Strong Amid Inflation Pressures, While the Euro Falters

The US dollar continues to show remarkable resilience, even as it faces potential adjustments stemming from overextended positions.

The US dollar continues to show remarkable resilience, even as it faces potential adjustments stemming from overextended positions. A combination of robust economic data and clear communication from the Federal Reserve has sustained the currency's bullish momentum, leaving few apparent drivers for a significant downturn. Federal Reserve Chair Jerome Powell has highlighted the enduring strength of the US economy, reinforcing the central bank's cautious stance on monetary easing. This has further solidified market confidence in the dollar, which remains a dominant force in the global currency markets.

Inflation and Monetary Policy

October’s inflation data provided a fresh reminder of the persistence of price pressures within the US economy. Both the Consumer Price Index (CPI) and Producer Price Index (PPI) registered monthly increases of 0.3%, a level that underscores the Federal Reserve's continued vigilance. These figures are high enough to deter any meaningful shift toward a dovish monetary policy stance. Powell’s recent remarks echoed this sentiment, emphasizing the need for prudence as the Fed evaluates its next steps. This has diminished speculation surrounding a rate cut in December, with market expectations now pared down to a modest 15 basis points.

The Euro’s Struggles

In contrast to the dollar’s strength, the euro has been under sustained pressure, particularly against the USD. Recently, it has hovered near the key 1.0500 threshold, with only brief rebounds that have failed to alter the prevailing bearish sentiment. Market participants continue to view rallies in the euro as selling opportunities, reinforcing its downward trajectory.

EURUSD 1.05 Support 

 Source: Finlogix ChartsMinutes from the European Central Bank’s (ECB) October meeting revealed ongoing divisions within the Governing Council regarding inflation dynamics and the appropriate course for monetary policy. This lack of consensus has contributed to a cautious policy outlook, with some officials hesitant to pursue aggressive easing. Speeches from key ECB figures, particularly those advocating dovish positions, could exert additional downward pressure on the euro in the coming weeks.

While the 1.0500 level offers some short-term support, projections suggest that the euro may weaken further, potentially reaching 1.0400 by the end of the year. This forecast aligns with market expectations for a 50-basis-point rate cut by the ECB in December, which would further narrow the euro’s appeal.

Outlook and Strategic Implications

The US dollar is expected to maintain its upward momentum unless there is a substantial shift in macroeconomic conditions or Federal Reserve policy signals. Nevertheless, its current positioning makes it vulnerable to short-term corrections. For the euro, the combination of cautious ECB policymaking and ongoing market pressures points to continued weakness.

DXY H4

 Source: TradingViewThis content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplies by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.

Regulation: ASIC (Australia), FSCA (South Africa)
read more
Dollar Dominates After Trump’s Trade Strike| 11th July, 2025

Dollar Dominates After Trump’s Trade Strike| 11th July, 2025

On July 10, silver extends gains toward $36.50 amid rising macro uncertainty and safe-haven demand. The US Dollar weakens, boosting AUD and NZD. USD/JPY trims early losses as BoJ hike hopes fade, while EUR/JPY retreats from highs on softening sentiment. Markets brace for US Jobless Claims to guide the next leg in global risk and Fed rate expectations.
Moneta Markets | 13h 30min ago
ATFX Market Outlook 11th July 2025

ATFX Market Outlook 11th July 2025

U.S. stock indices, the S&P 500 and Nasdaq, closed slightly higher on Thursday, both reaching new record closing highs. Optimism was boosted by Delta Air Lines' positive earnings forecast and Nvidia's record-breaking market capitalisation, helping investors remain unfazed by Trump’s latest tariff announcements.
ATFX | 16h 48min ago
ATFX Market Outlook 10th July 2025

ATFX Market Outlook 10th July 2025

U.S. President Donald Trump announced new tariffs on seven countries, stating earlier this week that a 25% tariff would be imposed on Japan and other trade partners starting in August. Despite this, Wall Street closed higher on Wednesday, with the tech-heavy Nasdaq leading the gains.
ATFX | 1 day ago
ATFX Market Outlook 9th July 2025

ATFX Market Outlook 9th July 2025

On Tuesday, U.S. President Donald Trump escalated the global trade war by announcing a 50% tariff on imported copper and reiterated that long-threatened tariffs on semiconductors and pharmaceuticals are also imminent. U.S. equities ended mixed as investors awaited further clarity on trade policy. The Dow Jones Industrial Average fell 0.37%, the S&P 500 dipped 0.07%, while the Nasdaq edged up 0.03%
ATFX | 2 days ago
EUR/USD Declines as Markets Await US Tariff Developments

EUR/USD Declines as Markets Await US Tariff Developments

The EUR/USD pair dropped to 1.1746 on Tuesday, with the US dollar holding a slight edge before correcting. The greenback faced pressure after Donald Trump announced new tariffs on 14 countries that have yet to secure trade agreements with the US.
RoboForex | 3 days ago
ATFX Market Outlook 8th July 2025

ATFX Market Outlook 8th July 2025

U.S. President Trump signed an order delaying “reciprocal” tariffs from July 9 to August 1 and warned of steep hikes from that date, escalating trade tensions. U.S. stocks closed sharply lower, with the Dow down 0.94%, the S&P 500 falling 0.79%, and the Nasdaq dropping 0.92%. Tesla also tumbled after Elon Musk announced plans to launch a new political party.
ATFX | 3 days ago
Gold Struggles for Direction as Risk Mood Sours | 7th July, 2025

Gold Struggles for Direction as Risk Mood Sours | 7th July, 2025

On July 7, gold slips below $3,350 as the USD strengthens and traders take profit amid tariff-related jitters. Silver lingers under $37. EUR/USD and NZD/USD retreat on weak sentiment, while USD/CAD rises above 1.3900 as oil weakens. Markets brace for key data including US CPI and Eurozone retail sales, with Fed speeches also in focus.
Moneta Markets | 4 days ago
ATFX Market Outlook 7th July 2025

ATFX Market Outlook 7th July 2025

U.S. dollar weakened against major currencies after President Trump’s landmark tax cut bill was passed, amid mounting pressure on countries to strike trade deals with Washington. As markets brace for the July 9 tariff deadline—targeting countries like Japan that have yet to reach agreements—the dollar index slipped 0.1% to 96.92.
ATFX | 4 days ago