EUR/USD falls for the fourth day in a row and dropped to 1.1265. The pair has not traded below 1.1300 since May 2025. Over the past four weeks, the euro has lost about 2.8% against the dollar.
The dollar holds near its highs
The DXY index, which shows the dollar's exchange rate against a basket of major currencies, is holding around 101.80, not far from its yearly highs. According to statistics, the dollar has strengthened in October in seven of the last ten cases.
What is weighing on the euro
Several factors are simultaneously affecting the European currency. The first is the rise in US government bond yields. The second is the high cost of oil, which supports inflation risks and demand for the dollar. The third is the debt situation in France, where government debt is at its highest level since 1946. Against this backdrop, some capital is flowing into the dollar.
Why the dollar remains strong
Chris Turner of ING attributes the dollar's strength not so much to the weakness of other currencies as to the state of the US economy. Consumer spending remains resilient, and ADP data, a private estimate of employment ahead of the official report, showed an acceleration in hiring. This supports expectations of a tighter Fed policy.
Weak PCE did not help the euro
US PCE inflation data came in weaker than forecast, and previous readings were revised downward. Usually such a backdrop can weigh on the dollar, but this time the euro did not receive sustained support. Eurozone statistics also turned out to be decent. The manufacturing PMI came in at 52.9 against a forecast of 52.7. In Germany, the figure came in at 53.9 against expectations of 53.8. Data for France and Italy also came in above forecasts. Despite this, EUR/USD continued to decline.
What's next
The main reference point for the market is the US employment report. An additional factor remains the negotiations between the US and Iran. So far there is no noticeable breakthrough in them. Against this backdrop, the dollar continues to be in demand, and EUR/USD is approaching new important levels.
Four weeks of trend - and how much did you take from it?
The trend is clearly visible even without additional indicators: four weeks of movement and about a 2.8% decline in the pair. But in prop trading, it is important to consider not only the direction, but also the conditions of a specific program. In some places, trading on news is allowed, in others, trades at the moment statistics are released are restricted. Spreads, available currency pairs, and the rules for calculating daily drawdown also differ. It is better to check this before buying a challenge, not after violating the account conditions.