The EUR/USD is steady at 1.1617 during North American trading, as investors wait for US inflation data. The US Dollar has seen a small increase of over 0.05%, while the Euro dipped to 1.1585. Light data releases are causing little movement in prices, even with Existing Home Sales in the US rising more than expected. Additionally, President Trump’s upcoming meetings with Asian leaders and the ongoing US government shutdown are influencing market sentiment.

Market Anticipation and Data Release

Traders are looking forward to the US Consumer Price Index (CPI) data, which is predicted to show an increase above 3%. In Europe, Consumer Confidence improved slightly in October, moving from -14.9 to -14.2. The Euro performed best against the Japanese Yen, gaining value against many major currencies. The heat map displays the Euro’s percentage changes against others, helping traders make better decisions. The EUR/USD is steady as traders await the US CPI, with the US Dollar Index up by 0.06%. The market is closely watching for decisions from the Federal Reserve, as a potential interest rate cut is being discussed. Commentators from the European Central Bank have differing views on future interest rate changes. Looking back, we observe that the market was stable around the 1.16 level for EUR/USD as it awaited important data. Today, on October 24, 2025, the currency pair is trading at a much lower level near 1.07, illustrating the significant changes in the economic landscape. This highlights the dollar’s strength over the past couple of years.

Impact of Inflation and Interest Rate Policies

Back then, there was concern that US inflation could rise above 3%. Now, the latest US CPI data from September 2025 shows persistent inflation at 3.5%. This ongoing inflation has caused central banks to maintain previously unthinkable policies. At that time, traders were expecting Federal Reserve rate cuts to approach 4.00%. However, the Fed has maintained its key rate in the 5.00% to 5.25% range for five consecutive quarters to bring inflation back to target. This significant and sustained interest rate gap is the main reason pressuring the EUR/USD. In Europe, the discussion between ECB hawks and doves has led to a more aggressive policy than many anticipated. Despite the ECB’s deposit rate being at 4.00% and recent Eurozone manufacturing PMI figures indicating contraction below the 50-point mark, the Euro has struggled to gain traction. The ongoing economic growth gap between the US and Europe limits the Euro’s potential. For our upcoming strategy, this situation reminds us that market expectations can often be misguided. With one-month implied volatility on EUR/USD options currently low at 7.5%, we see a chance to buy straddles ahead of next week’s US advance GDP report. This strategy allows us to profit from a significant price movement in either direction if the data surprises. Given the ongoing rate disparity, we should also explore strategies that take advantage of this gap. Selling EUR/USD futures contracts lets us earn the positive carry, which is the interest gained from being short on a lower-yielding currency and long on a higher-yielding one. This lower-risk strategy profits from the divergence in central bank policies rather than relying on a specific market direction. Create your live VT Markets account and start trading now.

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