The euro faces difficulties due to concerns over potential US tariffs.

• EUR/USD is under pressure around the 1.0600 level, as ECB policymakers appear more focused on the economic outlook than on curbing inflation.
• ECB’s Panetta highlighted the need for an expansionary monetary policy to ensure inflation doesn’t stay significantly below the bank’s target.
• Meanwhile, Deutsche Bank anticipates a potential Fed rate cut in December, though it expects the decision to be a close one.

The euro has been the weakest performer among the G10 currencies since the election, as investors prepare for heavy US tariffs on Europe, following the appointment of hardline figures in the new Trump cabinet.

At present, EUR/USD seems to have found a temporary support around the 1.05 level, and it may prove challenging to dip below this point unless there are more negative developments, either from Europe or the incoming Trump administration.

This week, all attention in the Euro Area will be focused on Friday’s October business activity PMI figures, with economists expecting another reading of 50, indicating stagnant growth. Meanwhile, statements from ECB members Lagarde and De Guindos (on Wednesday and Friday) and Cipollone, Elderson, and Lane (on Thursday) could significantly influence the market.