EUR/USD refreshes weekly high as US Dollar plummets, US PCE inflation in focus.

EUR/USD rises as the US Dollar posts a fresh weekly low ahead of a slew of US economic data.
The optimism over Bessent maintaining fiscal discipline keeps the US Dollar under pressure.
ECB’s Centeno warned about the risk of price pressures remaining below the bank’s target.

EUR/USD posts a fresh weekly high to near 1.0560 in Wednesday’s North American session. The major currency pair strengthens as the US Dollar (USD) extends its downside after the release of a string of United States (US) economic data such as Durable Goods Orders for October, revised Q3 Gross Domestic Product (GDP) growth estimates, and Initial Jobless Claims data for the week ending November 22.

First estimates of Q3 GDP growth show that the US economy expanded by 2.8%, in line with preliminary estimates. Fresh orders for Durable Goods grew at a slower-than-expected pace. Durable Goods Orders rose by 0.2%, slower than estimates of 0.5%. In September, the economic data contracted by 0.4%. Meanwhile, individuals claiming jobless benefits for the first time surprisingly came in lower at 213K than the former release of 215K. Economists expected the Initial Jobless Claims to arrive at 217K.

The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, posts a fresh weekly low near 106.00. The Greenback was already in a correction mode after posting a fresh two-year high at around 108.00 on Friday. The correction was triggered after Scott Bessent, a veteran hedge fund manager, said that the objective of enacting tariffs will be “layered in gradually and the budget deficit will be reduced to 3% of Gross Domestic Product (GDP) by slashing spending,” a move that won’t result in high inflation than feared. The comments from Bessent came after US President-elect Donald Trump nominated him for Treasury Secretary.

Going forward, investors will pay close attention to the US Personal Consumption Expenditure Price Index (PCE) data for October, which will be published at 15:00 GMT. The PCE inflation data is the Federal Reserve’s (Fed) preferred inflation measure for decision-making on policy rates. The PCE report is expected to show that the headline inflation accelerated to 2.3% year-over-year in October from 2.1% a month earlier.

In the same period, the core PCE – which excludes volatile food and energy prices – is estimated to have risen by 2.8%, stronger than the former release of 2.7%. The month-on-month headline and core PCE are expected to have grown steadily by 0.2% and 0.3%, respectively.

The US PCE inflation data will influence Fed interest rate cut prospects for the December meeting. On Monday, Minneapolis Fed Bank President Neel Kashkari said it is reasonable to consider another interest rate reduction in the December meeting. His viewpoint of an interest rate cut next month was backed by expectations that inflation is gently trending down and the labor market remains strong right now.