On December 2, European Central Bank (ECB) Governing Council member Joachim Nagel signaled satisfaction with the current monetary policy stance. "Our projections also indicate that interest rates are now at an appropriate level," the Bundesbank president stated in a Monday speech, echoing recent standard remarks from ECB officials. "The eurozone's monetary policy is broadly neutral at present." Nagel, considered one of the more hawkish members, added that new forecasts would include preliminary 2028 outlooks, enabling assessment of medium-term inflation targets. ECB President Christine Lagarde last week noted the central bank's favorable position with borrowing costs at current levels. Survey data suggests Eurozone inflation likely held at 2.1% in November.
Separately, Bank of England Monetary Policy Committee member Megan Greene emphasized needing further labor market softening before supporting additional rate cuts. Greene observed "stabilization" in employment and vacancy data Monday, signaling continued opposition to further policy easing. She noted weaker-than-expected consumer spending could also alter her rate stance. "I need to see further labor market deterioration reflected in both unemployment and employment data," Greene said in an interview. While acknowledging softening employment could shift her position, she pointed to recent signs of stabilizing labor demand.
Key data releases to watch include November Eurozone harmonized CPI and October unemployment figures.
**Dollar Index** The dollar index edged lower Monday amid consolidation, currently trading near 99.50. Growing expectations for a December Fed rate cut pressured the greenback, compounded by disappointing U.S. manufacturing data showing the PMI remaining below the 50 expansion threshold for nine consecutive months. Resistance now stands near 100.00, with support around 99.00.
**EUR/USD** The euro gained modestly Monday to 1.1610, supported by dollar weakness and lingering optimism from recent ECB comments. However, lackluster Eurozone economic data capped gains. The pair faces resistance near 1.1700, with support at 1.1500.
**GBP/USD** Sterling consolidated slightly lower at 1.3210 as profit-taking and fading budget optimism offset hawkish BoE rhetoric and Fed dovish expectations. Key levels include 1.3300 resistance and 1.3100 support.
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