The EUR took a hit in the afternoon after European Central Bank (ECB) member Villeroy stated that he wouldn't rule out going below the neutral rate in the future. He went on to say that ''optionality should remain open on the size of a cut'' in December.
Germany's CPI showed an upward trend in November compared to last year, yet it didn't quite meet expectations.
*Daily move - against G10 rates at 7:30am, 29.11.24
** Indicative rates - interbank rates at 7:30am, 29.11.24
JPY soared overnight after Japan’s inflation numbers came in hotter than expected, raising the odds of the Bank of Japan (BoJ) hiking rates in December.
The gains in JPY led to a sell-off in USD propelling GBPUSD to hit 2-week highs and EURUSD 1-week highs. However much of the gains on both currency pairs have eased off since.
For the rest of the day, Eurozone CPI numbers will be the highlight and likely determine whether the ECB will cut rates by 25bps or 50 bps on the 12th December. A hot CPI number will likely see EUR gain.
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