The euro is moving in the positive zone at the beginning of the week's trading

The euro rose in the European market on Monday against a basket of global currencies, moving in the positive zone at the beginning of the week’s trading against the US dollar, holding above the lowest level in a week, thanks to relative activity in purchases from low levels.

Despite this rise, the single currency is still under negative pressure resulting from renewed concerns about interest rate differences between Europe and the United States, in light of the weak prospects for raising interest rates by the European Central Bank.

Euro exchange rate today

The euro rose against the dollar by 0.25% to $1.0538, from the opening price of $1.0514, and recorded today’s lowest level at $1.0508.

On Friday, the euro lost 0.2% against the dollar, the second daily loss in a row, due to risk aversion, focusing on buying the dollar as a safe haven.

The euro lost 0.75% last week against the dollar, resuming its weekly losses that were temporarily halted the previous week for the first time in the last three months, due to bets about raising US interest rates.

European interest

The European Central Bank has made important progress in bringing inflation back to its target level, but there is still a long way to go and raising interest rates again cannot be ruled out, Dutch Central Bank President Klaas Knott said last week.

Despite these comments, the possibility of an additional increase in European interest rates before the end of this year remains weak, especially after the European Central Bank announced during its last September meeting that it had reached a restrictive interest rate.

American interest

Following last week's inflation data, futures pricing on the potential for a 25 basis point US interest rate hike during the November 1 meeting rose from 8% to 10%, and a hike during the December 13 meeting from 28% to 33%.

These data also confirmed the narrative spread in the markets that US interest rates are likely to remain fairly high for a long period of time until the US Federal Reserve can break inflation.

Interest rate differences

Interest rate differences between Europe and the United States are currently at only 100 points, the lowest difference since May 2022, and it is expected that these differences will expand again to 125 points before the end of this year, which is in the direction of a decline in the euro’s exchange rate against the US dollar. .