Euro approaches four-week highs as gains continue amid hot Eurozone inflation figures

EUR/USD moves towards four-week highs of 1.1280 as its rebound from lows near 1.1100 gathers pace.
October's preliminary figures showed Eurozone consumer inflation climbing to its highest level in three years.
Pressure persists on the USD following a decisive Democratic win in the US midterm elections.

The Euro (EUR) is gaining ground more rapidly against the US Dollar (USD) on Wednesday, with sentiment supported by a decisive Democratic victory in the US midterm elections and elevated Eurozone inflation readings. Having advanced more than 0.6% on the day, EUR/USD reached session highs just a few pips below the upper end of its four-week trading range, in the 1.1260-1.1280 region.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

High energy prices drove the preliminary Harmonized Index of Consumer Prices (HICP) to an annual growth rate of 4% in October, according to Eurozone figures published earlier on Wednesday. This marked a three-year high, up from September's 3.8%.

The inflation readings increase pressure on the European Central Bank (ECB) to continue tightening monetary policy in the months ahead. They have also counterbalanced investor disappointment over the downward revision to October's HCOB Services Purchasing Managers’ Index (PMI), published earlier in the day.

Why is Trump’s US midterm defeat weighing on the US Dollar?

By contrast, the US Dollar remains under strain following reports of a decisive Democratic victory in Tuesday's US midterm elections. Alongside securing control of both chambers, the Democrats have won over historically Republican strongholds, including Kansas and Texas.

Technology shares have faced additional selling pressure, while demand for safe-haven government bonds has strengthened, as investors grow concerned that the Democrats will regulate the AI sector and curb data centre construction plans.

Offering another interpretation, Rabobank analysts note that markets view Democratic control of Congress as signalling “fewer fiscal giveaways and therefore less inflation,” a mix that “suggests lower yields on Treasuries, which have negative implications for the USD.”

Economic Data Release

What Does the Harmonized Index of Consumer Prices (MoM) Measure?

Price movements across a representative basket of goods and services in the European Monetary Union are tracked by the Harmonized Index of Consumer Prices (HICP). Eurostat publishes the index every month. Its harmonised approach applies a common methodology across all member states, with each state's contribution weighted. The MoM reading compares goods prices in the reference month with those in the preceding month. A higher reading is generally regarded as bullish for the Euro (EUR), whereas a lower reading is viewed as bearish.

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Latest release: Wed 04 Nov 2026 10:00 (Prel)

Release frequency: Monthly

Reported figure: 0.4%

Consensus estimate: -

Prior reading: 0.6%

Data source: Eurostat

About the Economic Indicator

What Does the Harmonised Index of Consumer Prices (YoY) Measure?

A high Harmonised Index of Consumer Prices (HICP) reading is generally considered bullish for the Euro (EUR), whereas a low reading is viewed as bearish. Published monthly by Eurostat, the index tracks price movements in a representative basket of goods and services across the European Monetary Union. Harmonisation rests on a common methodology applied in every member state, with each state's contribution weighted. The YoY figure compares prices in the reference month with those in the same month a year earlier.

View further details.

Latest release: Wed, 4 Nov 2026 10:00 (Prel)

Release frequency: Monthly

Actual reading: 4%

Consensus estimate: 4%

Previous reading: 3.8%

Data source: Eurostat