The euro fell below $1.058, approaching the over-one-year low of $1.0496 reached last week, weighed down by a strong dollar.
Euro remains under pressure
Traders are closely watching Donald Trump’s political appointments for his new administration and the potential impact of his presidency on Europe, particularly regarding tariffs on the EU and China. Investors are also focused on Trump’s choice for Treasury Secretary, as his proposed policies, including tariffs and debt-financed tax cuts, could drive inflation and reduce the Federal Reserve’s need for further rate cuts.
Weak outlook dampens ECB expectations of policy change
Meanwhile, Europe’s weak economic outlook continues to dampen expectations of significant shifts in ECB policy. Markets are awaiting key indicators such as Eurozone negotiated wage growth and upcoming PMI data. The ECB is expected to cut its deposit rate by another 25 basis points in December, with projections suggesting it could decline to around 1.9% by July.
