EUR/USD stays under pressure as ECB officials support more rate cuts

EUR/USD sees more downside below 1.0500 as ECB policymakers are concerned about growing risks to Eurozone economic growth.

ECB’s Villeroy supports more rate cuts as the balance of risks to inflation and growth is shifting to the downside.

Investors will pay close attention to the flash Eurozone/US PMI data for November on Friday.

EUR/USD remains vulnerable above the psychological support of 1.0500 in European trading hours on Thursday. The major currency pair faces selling pressure due to the Euro’s weak performance on expectations that the European Central Bank (ECB) could accelerate its policy-easing cycle.

The ECB is widely anticipated to cut its Deposit Facility Rate again by 25 basis points (bps) to 3% in the December meeting and is expected to head towards the neutral range faster in 2025 as market participants worry about the Eurozone’s economic outlook.

Investors expect the European Union (EU) to go through a rough time when US President-elect Donald Trump takes office and implements his economic agenda, which would lead to a potential global trade war, especially with the Eurozone and China. In his election campaign, Trump mentioned that the euro bloc will "pay a big price" for not buying enough American exports.