EUR/USD price drops to a 5-month low on Trump poll lead
ECB president's speech crucial for euro outlook as EUR/USD traders await guidance
EUR/USD bulls had high hopes for the euro to push past 1.0900, yet the story took a turn even as strong German factory data pointed to recovery. The euro wasn’t able to hold its ground as recent U.S. election polls showed Donald Trump leading the votes, injecting fresh energy into the dollar. The impact? A plunge to the 1.0700 level, a five-month low for the euro.
However, the 1.0700 level cushioned EUR/USD from further losses due to Germany’s manufacturing sector which provided a much-needed boost with a 4.2% rise in September factory orders, reversing the prior month’s 5.4% decline. This rebound in demand for German goods is a clear sign of life in the country’s industrial base. Typically, such a surge would offer support for the Euro, bolstering confidence in the currency's recovery. However, this positive momentum couldn’t counter the U.S. dollar’s recent climb, largely driven by the prospect of a Trump presidency.
ECB president's speech to influence Euro outlook
For EUR/USD traders, ECB President Christine Lagarde’s upcoming speech could be the key to understanding what’s next for the Euro. The European Central Bank (ECB) recently reduced its interest rates by 25 basis points, marking the third consecutive rate cut in October. By bringing rates on deposit facilities, refinancing, and lending operations down to 3.25%, 3.40%, and 3.65% respectively, the ECB signaled a cautious stance. The bank aims to manage inflation, which recently dropped below the 2% target for the first time in over three years. Traders are now focused on whether the ECB will stick to this path or provide a more hawkish outlook.
As EUR/USD hovers near the 1.0700 mark, traders will listen closely, hoping for insights into whether the ECB might shift its stance given Germany’s manufacturing strength. A hawkish tone could offer EUR/USD a chance to recover from recent lows.
Election uncertainty holds EUR/USD bulls at 1.0900 threshold. Market participants are eyeing this political uncertainty as a key driver.
