EUR/USD rally stalls as investors await further US data releases

The Euro stalls below 1.1600 after rallying from 1.1500 lows earlier this week.
The ECB has warned about elevated risks to financial stability and high public debt.
US Retail Sales and Producer Price Index fed hopes of further Fed monetary easing in December.

EUR/USD holds gains on Wednesday, although it remains capped below the 1.1600 line, trading at 1.1575 at the time of writing. European Central Bank’s (ECB) concerns about financial risks have dampened investors’ appetite for risk, although the higher hopes that the US Federal Reserve (Fed) will cut interest rates in December are keeping the US Dollar upside attempts limited for now.

US economic data released on Tuesday revealed a weaker-than-expected increase in Retail Sales in September, while the Producer Price Index continued to grow at a steady pace. Consumer Confidence deteriorated, with households wary about higher costs and sluggish job prospects. These figures reinforced market expectations of immediate Fed interest rate cuts, adding pressure on the US Dollar.

Meanwhile, US and Ukrainian representatives continue working on the roadmap for a peace plan. US President Donald Trump affirmed on Tuesday that the original plan has been “fine-tuned with additional input from both sides” and that he will send special envoy Steve Witkoff to meet Russian President Vladimir Putin next week. This news and the positive reaction from Ukrainian President Volodymyr Zelensky have contributed to improving market sentiment and provided additional support to the Euro.

In the economic calendar, the US Durable Goods and Initial Jobless Claims will attract attention during Wednesday’s US trading session. Later on, ECB board member Philip Lane, and the president Christine Lagarde are expected to meet the press.