Euro rises to near 1.1250, US midterm elections in spotlight
The EUR/USD pair edges higher to around 1.1240 during the early Asian trading hours on Wednesday. US midterm election uncertainty exerts some selling pressure on the US Dollar (USD) against the Euro (EUR).
The Euro (EUR) strengthened to near 1.1250 against the US Dollar (USD) on Wednesday, as political uncertainty surrounding the US midterm elections cast a shadow on the US Dollar. Traders kept a close eye on the election results and upcoming US September jobs data. Americans cast their votes in midterm elections, which would determine the outcome for US President Donald Trump's second term and control of Congress.
In the US House, about two dozen seats were projected as won, with no close races expected. In the Senate, Democrats won the first seven of 35 seats, needing a net of four more to gain control. Monetary policy was a key driver, with the European Central Bank (ECB) signaling potential interest rate hikes due to inflation concerns.
ECB Governor Joachim Nagel indicated a December rate hike was likely, while other officials suggested further increases could be necessary. Analysts noted that the ECB's hawkish stance kept the door open for a December hike, with Dec OIS pricing a 22bps tightening risk. The Euro remained softer against the Dollar amid uncertainties, but the persistent higher energy costs in the Eurozone remained a factor in inflation.
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