The EURUSD loses more than 0.3% today, and the perspective of limited Fed rate cuts in 2025 ‘under Trump’ appears to be changing investor expectations, clearly in favor of the dollar. As a result, US-Eurozone yield spreads may speak clearly in favor of the US, putting long-term pressure on the euro, where the baseline scenario is to keep inflation at or below 2%, as suggested by ECB member Panetta’s statements yesterday. The focus of attention, in the coming months, will be on U.S. tariff policy, and its tightening could, in an extreme scenario, evn halt the Fed’s monetary easing, for longer. Also, Wells Fargo Investment Institute raised the 2025-end 10-year treasury yield forecast to 4.50%-5.00% from the prior forecast of 4.00%-4.50%.
Economic survey results
- The risk of a resurgence of inflation in the U.S. next year has increased, 57 of 67 economists surveyed said.
- The Fed will cut the interest rate by 25 bps in December to 4.25%-4.50% according to 94 of 106 economists.
- The Fed will cut rates to 3.50%-3.75% by the end of 2025, according to the median survey (3.00%-3.25% was expected in October).
- Trump’s proposed tariffs will have a significant impact on the U.S. economy, say 44 of 51 economists.
- Economists say China is likely to introduce more stimulus measures to counter Trump’s tariffs.
- Trump’s proposed import tariffs could reduce China’s growth in 2025 by about 0.5-1%. The median estimate is that Trump will impose 38% tariffs on Chinese goods early next year.
EURUSD is trading in a potentially bearish flag pattern and a bottom breakout below 1.054 could indicate another downward impulse.
Source: xStation5
The material on this page does not constitute financial advice and does not take into account your level of understanding, investment objectives, financial situation or any other specific needs. All information provided, including opinions, market research, mathematical results and technical analyzes published on the Website or transmitted To you by other means, it is provided for information purposes only and should in no way be construed as an offer or solicitation for a transaction in any financial instrument, nor should the information provided be construed as advice of a legal or financial nature on which any investment decisions you make should be based exclusively To your level of understanding, investment objectives, financial situation, or other specific needs, any decision to act on the information published on the Website or sent to you by other means is entirely at your own risk if you In doubt or unsure about your understanding of a particular product, instrument, service or transaction, you should seek professional or legal advice before trading. Investing in CFDs carries a high level of risk, as they are leveraged products and have small movements Often the market can result in much larger movements in the value of your investment, and this can work against you or in your favor. Please ensure you fully understand the risks involved, taking into account investments objectives and level of experience, before trading and, if necessary, seek independent advice.
