White House Endorses Shutdown Resolution
EUR/USD remains stable as a White House-endorsed shutdown resolution limits Euro increases. The pair is steady at 1.1560, with US government closure hitting 41 days, and Federal Reserve commentary influencing market sentiments amid sparse data releases. Recent US data signals economic strain, while caution is seen in European Central Bank stances.
The White House supports a bipartisan deal to reopen the government shortly. Despite Senate approval, the House Representatives await notice to return for passing the bill. The US Dollar Index holds at 99.56, driven by mixed Federal Reserve signals on economic resilience and inflation.
The Challenger report revealed a high of 153,000 job cuts in October, the most in two decades, indicating expectations for policy easing by the Fed. Divergent monetary policies between the ECB and Fed may influence further EUR/USD changes. Eurozone inflation closer to the 2% target is noted by ECB Vice President de Guindos, with caution advised by other policymakers.
Looking ahead, market attention shifts to Europe’s economic sentiment indices. Despite recent bullish days, EUR/USD may remain downward biased without strength to surpass key resistance levels. Key upcoming economic indicators and sentiment surveys will play roles in dictating currency movements.
As of November 11, 2025, we see EUR/USD trading flat around 1.1560, caught between two major forces. The primary drag on the US Dollar is the ongoing 41-day government shutdown and signs of a cooling American economy. Meanwhile, the Euro is finding support from a more cautious European Central Bank, creating a clear policy divergence that we must watch.
Economic Implications of the Shutdown
The shutdown is beginning to bite, with the Congressional Budget Office recently estimating it shaves 0.2% off quarterly GDP for every week it continues. This confirms the weak data we’ve seen, like last week’s Challenger report on job cuts and the most recent Non-Farm Payrolls for October 2025, which came in at just 95,000, far below expectations. This economic strain is fueling bets that the Federal Reserve will have to act soon to support the economy.
We are now looking at a 66% probability of a Fed rate cut in December, a stark contrast to the ECB’s position. Recent Eurozone data showed core HICP inflation holding stubbornly at 2.8% year-over-year, giving ECB officials reason to maintain current interest rates. This growing gap in monetary policy outlook, which is reminiscent of the dollar weakness we saw in late 2023 when the Fed first signaled a policy pivot, makes a stronger Euro the more likely outcome.
For derivative traders, this outlook suggests buying EUR/USD call options to capitalize on potential upside in the coming weeks. We should consider options with December 2025 or January 2026 expiries to cover the period of the next Fed meeting. Strikes around 1.1650 or even 1.1700 could offer significant returns if the expected policy divergence plays out and the pair breaks through its key resistance levels.
However, we must manage the downside risk, as a sudden deal to end the shutdown could cause a sharp, short-term rally in the Dollar. If the pair fails to break above the 20-day average at 1.1592, the upward momentum may fade. We can use put options with a strike below 1.1500 as a hedge or to position for a potential slide towards the August cycle low of 1.1391.
