Trade The World
EUR/USD remains bid, US Dollar dives on Fed independence fears
Ni Guillermo Alcala
Petsa ng Pag-publish: 12 Jan 2026 | Petsa ng Pag-edit: 12 Jan 2026
POPULAR ARTICLES
EUR/USD is trading near 1.1690 at the time of writing, 0.4% higher on daily charts after bouncing from one-month lows at the 1.1620 area earlier on the day.
- EUR/USD resumes its recovery and approaches the 1.1700 area.
- Eurozone Sentix data has shown a significant improvement in investors' confidence
- Concerns about the Fed's independence are hammering confidence in the US Dollar.
EUR/USD is trading near 1.1690 at the time of writing, 0.4% higher on daily charts after bouncing from one-month lows at the 1.1620 area earlier on the day. An upbeat Eurozone Sentix Consumer Sentiment Index and a weak US Dollar (USD) amid renewed attacks from the US government against the Federal Reserve Chairman Jerome Powell have been underpinning demand for the Euro (EUR) on Monday.
The New York Times has reported on Sunday that Powell is under criminal investigation for his testimony before the Senate Committee regarding renovations to a Federal Reserve building. Powell has responded with a video, stating that the investigation is “unprecedented” and framing it as a series of threats aimed at bending the central bank's arm into lowering interest rates.
Apart from that, violence has escalated in Iran, where the regime is reported to have killed hundreds of protesters this weekend, with the Threat of a US intervention looming.
The economic calendar is thin on Monday, but in this context, the speech from Atlanta Fed President Raphael Bostic will be observed with particular interest. Later this week, the release of the US Consumer Price Index (CPI) data, due on Tuesday, and a slew of speeches from Fed Officials might shed more light on the Fed's interest rate-cut path.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.40% | -0.46% | -0.02% | -0.27% | -0.31% | -0.49% | -0.41% | |
| EUR | 0.40% | -0.05% | 0.39% | 0.13% | 0.10% | -0.08% | -0.01% | |
| GBP | 0.46% | 0.05% | 0.45% | 0.19% | 0.16% | -0.03% | 0.04% | |
| JPY | 0.02% | -0.39% | -0.45% | -0.26% | -0.29% | -0.48% | -0.40% | |
| CAD | 0.27% | -0.13% | -0.19% | 0.26% | -0.03% | -0.22% | -0.14% | |
| AUD | 0.31% | -0.10% | -0.16% | 0.29% | 0.03% | -0.19% | -0.12% | |
| NZD | 0.49% | 0.08% | 0.03% | 0.48% | 0.22% | 0.19% | 0.07% | |
| CHF | 0.41% | 0.00% | -0.04% | 0.40% | 0.14% | 0.12% | -0.07% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Daily Digest Market Movers: US Dollar remains vulnerable with Fed's independence into question
- The criminal probe against Fed Chairman Powell marks a new stage in the unprecedented political pressures on the central bank and a message to the next Fed chair. This undermines the central bank's independence to set its monetary policy and erodes the US Dollar's status as a reserve currency.
- Meanwhile, tensions in Iran continue growing. News reported that the Islamic regime's response to the protests in the country has caused hundreds of deaths, and Tehran has threatened to target US military bases if they detect signs of an impending attack.
- On the macroeconomic front, the Eurozone's Sentix Economic Confidence Index has improved to a reading of -1.8 in January from -6.2 in December. This is the best performance in the last six months and marks a significant improvement in investors' sentiment about the region's economy. The impact on the Euro (EUR), however, has been marginal.
- US data released on Friday revealed that the US labour market remains stalled but not deteriorating further. The jobless rate declined beyond expectations, adding to the case that the Fed will keep interest rates unchanged at its next monetary policy meeting, due on January 27 and 28.
- Beyond that, January's preliminary Michigan Consumer Sentiment Index rose to 54.0, from 52.9 in December, beyond the 53.5 reading expected by the market. These figures show the second consecutive improvement, which points to a stronger economic outlook and supports the idea of a steady monetary policy at January's Fed meeting.
Technical Analysis: EUR/USD recovery is likely to be tested at the 1.1700 area
EUR/USD has bounced up strongly from one-month lows at the 1.1620 area. The pair remains trading within a descending channel from late-December highs, but technical indicators on the 4-hour chart have turned higher.
The Moving Average Convergence Divergence (MACD) line has crossed above the signal line, hinting at a fading bearish pressure, while the Relative Strength Index (RSI) has breached the key 50 level, signaling some momentum improvement.
On the upside, the pair is likely to find significant resistance at the confluence of the channel's top with the January 7 high, near 1.1700. Above here, the target is the January 6 high, at 1.1742. To the downside, the pair has a significant support above 1.1615 (December 8 and 9 lows) ahead of the December 2 low, near 1.1590.
(The technical analysis of this story was written with the help of an AI tool.)
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
FXStreet
Higit sa isang milyong user ang umaasa sa FXStreet para sa real-time market data, charting tools, expert insights, at Forex news. Ang komprehensibong economic calendar at educational webinars nito ay tumutulong sa mga trader na manatiling may alam at gumawa ng kalkuladong mga desisyon. Sinusuportahan ang FXStreet ng humigit-kumulang 60 propesyonal sa pagitan ng Barcelona HQ at iba’t ibang rehiyon sa buong mundo.
Read More
