The euro rose on Tuesday against a basket of global currencies, extending its gains for the fifth consecutive day against the US dollar, hitting a one-week high. Markets were in a positive mood amid positive developments in the US-China trade negotiations.
These gains were also supported by the US currency's decline ahead of an expected Federal Reserve interest rate cut decision tomorrow, Wednesday, with strong indications of another cut before the end of the year.
Renewed inflationary pressures in the eurozone have diminished the likelihood of the European Central Bank cutting interest rates at this week's meeting. Details of the meeting are expected to provide further solid evidence about the path of European interest rates over the remainder of this year and next.
Price overview
Today's Euro exchange rate: The Euro rose against the Dollar by 0.2% to ($1.1667), the highest in a week, from today's opening price of ($1.1644), and recorded a low of ($1.1644).
The euro ended Monday's trading up 0.15% against the dollar, its fourth consecutive daily gain, amid improved risk appetite in the markets.
Commercial developments
All eyes are on the scheduled meeting between US President Donald Trump and Chinese leader Xi Jinping in South Korea on Thursday. Trump told reporters aboard Air Force One before landing in Tokyo, I have great respect for President Xi, and I think we will reach an agreement.
Analysts said that signs of progress made by the two countries on various issues, and the possibility of the United States reducing tariffs on China, are sufficient to boost investor sentiment and increase appetite for higher-risk assets.
US dollar
The dollar index fell more than 0.2% on Tuesday, extending its losses for the second consecutive session, reflecting the continued decline in the US currency's levels against a basket of major and minor currencies.
The dollar is declining ahead of an expected decision by the Federal Reserve tomorrow, Wednesday, to cut interest rates by about 25 basis points, the second consecutive US rate cut. There is also a possibility of an additional cut before the end of the year.
European Central Bank
The European Central Bank meets on Wednesday and Thursday to consider monetary policy appropriate to recent economic developments in the European Union.
The bank is widely expected to keep European interest rates unchanged at 2.15%, the lowest level since October 2022, for the third consecutive meeting.
The market is awaiting further evidence on when the European Central Bank will resume its monetary easing cycle and cut interest rates before the end of this year.
