Four-week highs in sight as euro climbs further on hot Eurozone inflation data

1.1280 is in sight for EUR/USD as its rebound from lows near 1.1100 continues towards four-week highs.
October consumer inflation in the Eurozone reached a three-year high, preliminary figures showed.
A decisive Democratic win in the US midterm elections keeps the USD under pressure.

EUR/USD rallied more than 0.6% on Wednesday. Strong Eurozone inflation figures and a decisive Democratic victory in the US midterm elections accelerated the Euro’s (EUR) recovery against the US Dollar (USD). The pair touched session highs just a few pips below the top of its four-week trading range, in the 1.1260-1.1280 area.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

At 4% year-on-year in October, the preliminary Harmonised Index of Consumer Prices (HICP) reached its highest level in three years. Eurozone figures published earlier on Wednesday showed an acceleration from September’s 3.8%, driven by high energy prices.

Pressure on the European Central Bank (ECB) to tighten monetary policy further in the months ahead has increased as a result. The inflation figures also outweighed investor disappointment over the downward revision to October’s HCOB Services Purchasing Managers’ Index (PMI), published earlier in the day.

US Dollar under pressure after Trump’s midterm defeat

Tuesday’s US midterm elections delivered a decisive Democratic victory, leaving the US Dollar struggling. The Democrats secured control of both chambers and won over traditional Republican strongholds, including Kansas and Texas.

Tech shares have come under greater pressure as investors worry that the Democrats will regulate the AI sector and curb data centre construction plans. Those concerns have also lifted demand for safe-haven government bonds.

Offering another perspective, Rabobank analysts note that markets have read Democratic control of Congress as signalling “fewer fiscal giveaways and therefore less inflation,” a combination that “suggests lower yields on Treasuries, which have negative implications for the USD.”

Economic Data

Monthly Harmonised Index of Consumer Prices (MoM)

Published monthly by Eurostat, the Harmonised Index of Consumer Prices (HICP) tracks price movements in a representative basket of goods and services across the European Monetary Union. A common methodology across all member states, with weighted contributions, makes the index harmonised. The MoM reading compares goods prices in the reference month with those in the preceding month. A high reading is generally regarded as bullish for the Euro (EUR); a low reading is generally viewed as bearish.

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Latest release: Wed 04 Nov 2026 10:00 (Prel)

Release frequency: Monthly

Reported figure: 0.4%

Consensus estimate: -

Prior reading: 0.6%

Data source: Eurostat

Economic Data Indicator

YoY: Harmonised Index of Consumer Prices

Year-on-year (YoY) price changes are tracked by the Harmonised Index of Consumer Prices (HICP). The index covers a representative basket of goods and services in the European Monetary Union. Eurostat publishes the HICP monthly, using a common methodology across all member states and weighting each state's contribution. This consistent approach makes the index harmonised. The YoY figure compares prices in the reference month with those in the same month a year earlier. A high reading is generally regarded as positive for the Euro (EUR); a low reading is generally regarded as negative.

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Latest release: Wed 4 Nov 2026 10:00 (Preliminary)

Release frequency: Monthly

Reported figure: 4%

Consensus forecast: 4%

Prior reading: 3.8%

Data source: Eurostat