EUR/USD continues to drift lower for a third straight session, slipping below the 1.1650 level and trading near 1.1640 during Asian trading on Thursday. The pair remains under pressure as the US Dollar strengthens on the back of solid US economic data, which has reinforced expectations that the Federal Reserve will keep interest rates unchanged for the foreseeable future.
At the time of writing, EUR/USD is hovering just above 1.1630, edging closer to its one-month low of 1.1618. The Greenback is finding renewed support from upbeat macroeconomic indicators and easing investor concerns surrounding the Federal Reserve’s independence.
Data released on Wednesday showed producer prices rising faster than anticipated, while US retail sales posted a strong rebound in November. Together, these figures have strengthened the case for the Fed to remain on hold in the coming months. Adding to Dollar support, President Donald Trump sought to reassure markets by stating in an interview with Reuters that he has no intention of removing Fed Chair Jerome Powell, despite ongoing legal scrutiny. Earlier fears over political interference had weighed heavily on the Dollar and even prompted a rare joint statement from global central bankers defending the Fed’s autonomy.
Geopolitical tensions also eased slightly after Trump suggested that reports of protester killings in Iran had subsided, reducing the perceived risk of military escalation and softening recent risk-off sentiment.
Looking ahead, European traders will focus on November’s Industrial Production data for fresh direction, while in the US session attention will turn to the New York Empire State and Philadelphia Fed manufacturing surveys, along with additional remarks from Federal Reserve officials.
