Euro firms on ECB December hike report as dollar dips after data

The euro turned higher late on Thursday after a sources report said ECB policymakers see a December rate hike followed by a pause, according to investingLive. Investing.com reports that the dollar dipped and the euro rose after the Fed and ECB decisions, while the pound extended its gains.

That is a shift from earlier in the day, when the dollar edged up on a strong US GDP print and hot core PCE. The ECB itself left rates unchanged. The sources report added a hawkish signal on top of that hold.

What moved and why

Three threads drove the late session:

• ECB hike talk. The sources report pointed to a December move, then a pause, per investingLive. Lagarde also said growth should be underpinned in the near term, the same wrap notes.
• Sterling strength. Investing.com reports that sterling hit a 17-month high against the euro as the ECB held rates.
• Firm US labour data. Initial jobless claims came in at 194K against 199K expected, and continuing claims fell to 1.701 million, investingLive reports.

In Treasuries, a $44 billion 7-year note auction cleared at a high yield of 4.894% with no tail, which investingLive graded as slightly above average.

The majors

The table shows ECB reference rates from the fixing of 29 October 2026, compared with the 28 October fixing. The fixing is set once per day in the European afternoon, so it does not capture moves after the ECB sources report later in the session.

Over five fixings, EUR/USD is down 0.67% from 22 October and NZD/USD is down 1.13%. USD/JPY is up 0.64% over the same span. USD/CAD fell below 1.40 in the fixing, in line with Investing.com reporting that the Canadian dollar strengthened as traders assessed the Bank of Canada hike. Charts: EUR/USD and EUR/GBP.

Central banks and data in the news

Tokyo inflation runs hot

Tokyo headline CPI rose 2.8% year on year in October, above the 2.7% forecast, investingLive reports. Core CPI, which excludes fresh food, matched forecasts at 2.6%. The measure excluding fresh food and energy slowed to 2.4% against 2.7% expected. Japan's September unemployment rate fell to 2.4%. The mixed picture leaves USD/JPY near the 158 area seen in the latest fixing.

Geopolitics and risk mood

Trump said the Iran war will be over very soon, while UKMTO reported a tanker struck by an unknown projectile, according to investingLive. Iran's Ghalibaf said progress depends on agreeing its seven conditions, the same publisher notes.

Risk appetite also took a hit in crypto. Investing.com reports that bitcoin and other crypto prices fell after Binance reported a security issue. Our sister site covers the Binance hack and its impact on bitcoin.

What to watch next

1. ECB follow-up. Any confirmation or pushback on the December hike report reported by investingLive.
2. Tokyo CPI detail. investingLive said it will publish more on the data separately.
3. Big Tech earnings. The investingLive European wrap flagged Amazon as next after Alphabet revived AI spending fears.
4. Iran talks. Semafor reported ongoing talks on a temporary peace deal, per the same wrap. Oil remains sensitive to these headlines.
5. Binance fallout. Watch for any spillover from the crypto selloff into broader risk sentiment.