The euro fell in the European market on Thursday against a basket of global currencies, continuing its losses for the second day in a row against the US dollar, moving away from the highest level in three months, with corrections and profit-taking continuing.

Weak economic data in the euro zone also reinforced the hypothesis that the European Central Bank has finished its cycle of raising European interest rates, with the focus shifting to the timing of starting interest rate cuts to curb the stagnation of economic activities in the old continent.

Euro exchange rate today

The euro fell against the dollar by 0.15% to $1.0830, from the opening price of $1.0846, and recorded the highest level today at $1.0855.

Yesterday, Wednesday, the euro lost 0.3% against the dollar, the first loss in the last four days, due to correction and profit-taking operations, after recording the highest level in three months at $1.0887 the previous day.

On Tuesday, the euro achieved its largest daily gain in a year against the dollar, at about 1.7%, thanks to lower-than-expected data on key inflation rates in the United States during October, which strengthened the hypothesis that the Federal Reserve had already finished the cycle of raising US interest rates.

Weak data

Data released on Wednesday in Europe showed that industrial production fell by 1.1% during September, exceeding market expectations for a decline of 0.9%, and production recorded a rise of 0.6% in August.

In the latest indications of weakness in the euro zone economy during the third quarter of this year, enhancing the possibility that the European Central Bank will continue to stop raising interest rates during the coming period.

These disappointing data also contradict the recent market narrative, which says that peak pessimism has been reached regarding the Eurozone economy, which is putting negative pressure on the euro's exchange rate against a basket of global currencies.

Interest rate gap

In light of the currently strong possibilities that the European Central Bank and the Federal Reserve will keep interest rates unchanged during their last meeting of 2023 scheduled for next December, fears about the widening of the current gap in interest rates between Europe and the United States are receding.

The focus in the currency market has become on the timing of starting to make cuts in European and American interest rates during the year 2024, so that if speculation leans towards an early timing in the European Central Bank’s interest rate cuts, this will put pressure on the euro’s exchange rate against a basket of currencies led by the dollar. American.