Anna 
In the early European trading session on Thursday, the Euro to US Dollar (EUR/USD) currency pair found traction, benefiting from the challenge to the U.S. dollar following the Federal Reserve’s (Fed) decision to keep interest rates unchanged on Wednesday. At present, EUR/USD has climbed 0.24% to reach 1.0596.
The Fed’s monetary policy decision in November aligned with market expectations as it maintained interest rates within the range of 5.25% to 5.50%. It marked the first time in the tightening cycle that the Fed has paused its rate hikes in consecutive meetings. However, U.S. Treasury yields and the U.S. dollar experienced a slight dip, as investors priced in the possibility of further rate hikes.
Meanwhile, Fed Chair Powell attempted to convince the market that the committee will take measures to bring inflation back to its 2% target, although policy choices remain highly data-dependent.
On the Eurozone front, European Central Bank (ECB) Vice President Luis de Guindos suggested on Tuesday that recent Consumer Price Index (CPI) data indicated a decrease in Eurozone inflation, which could be seen as positive news for the ECB. Furthermore, ECB decision-maker Joachim Nagel stated on Tuesday that the ECB must maintain upward pressure on interest rates for a more extended period because Eurozone inflation has not been overcome, even as inflation rates significantly decreased last year.
Later on Thursday, traders will closely monitor the Manufacturing Purchasing Managers’ Indices (PMI) in Spain, Italy, France, Germany, and the Eurozone. Additionally, a speech by Philip Richard Lane, Chief Economist of the European Central Bank (ECB), may offer some hints regarding monetary policy guidance. In the U.S. session, the weekly initial jobless claims data up to October 27 will be released.
