White House Supports Government Shutdown Resolution

The EUR/USD exchange rate is stable due to the White House’s backing of a resolution to address the ongoing government shutdown. Currently, the rate sits at 1.1560. The US government has been closed for 41 days, and mixed signals from the Federal Reserve affect market attitudes, particularly as data releases are limited. Recent US reports show economic challenges, and the European Central Bank (ECB) shows caution. The White House is urging a bipartisan agreement to reopen the government soon. While the Senate has approved a deal, the House of Representatives is waiting to reconvene to pass the bill. The US Dollar Index is steady at 99.56, influenced by mixed messages regarding economic strength and inflation from the Federal Reserve. A recent Challenger report highlighted that job cuts reached 153,000 in October, the highest in two decades, raising expectations for the Fed to ease policies. The differences in monetary policies between the ECB and the Fed could impact EUR/USD movements. ECB Vice President de Guindos noted inflation in the Eurozone is approaching the 2% target but cautioned against assumptions. Looking ahead, markets are focused on Europe’s economic sentiment indices. Despite some recent positive days, EUR/USD might struggle to rise above key resistance levels without stronger support. Important economic indicators and sentiment surveys ahead will be crucial for currency movement. As of November 11, 2025, EUR/USD remains steady around 1.1560, caught between two major influences. The US Dollar faces pressure from the ongoing government shutdown and signs of a slowing economy. Conversely, the Euro gains support from a cautious ECB, indicating a clear policy difference that traders should monitor.

Economic Effects of the Shutdown

The government shutdown is starting to have serious consequences. The Congressional Budget Office reports that for every week it lasts, it reduces quarterly GDP by 0.2%. This aligns with recent weak data, such as the Challenger report on job cuts and the October 2025 Non-Farm Payrolls, which came in at only 95,000—well below expectations. The economic strain is leading to speculation that the Federal Reserve will need to take action soon. There is now a 66% chance of a Fed rate cut in December, contrasting sharply with the ECB’s stance. Recent Eurozone data shows core HICP inflation remains stubborn at 2.8% year-over-year, giving ECB officials reasons to keep interest rates unchanged. This growing divide in monetary policy, similar to the dollar weakness observed in late 2023 following the Fed’s first hints at policy changes, suggests a stronger Euro is likely. For traders in derivatives, this perspective supports buying EUR/USD call options to benefit from potential gains in the upcoming weeks. It’s wise to consider options with expirations in December 2025 or January 2026, which cover the period of the next Fed meeting. Strike prices around 1.1650 or even 1.1700 could yield significant returns if the anticipated policy difference materializes and the pair breaks through key resistance levels. However, we must remain cautious about risks, as a sudden agreement to end the shutdown could trigger a sharp, short-term rally in the Dollar. If EUR/USD cannot rise above the 20-day average at 1.1592, upward momentum might wane. Utilizing put options with a strike below 1.1500 could act as a hedge or position us for a possible drop towards the August cycle low of 1.1391. Create your live VT Markets account and start trading now.

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