XE Market Analysis: Europe – Dec 02, 2020

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The dollar and yen have remained soft versus most other currencies, although some caution emerged in global asset markets after a fresh rally yesterday. EUR-USD broke higher over the last day and today extended to a new 32-month high at 1.2089. Demand for euros was notable yesterday, and followed eurozone inflation data for November that came in below expectations in posting a fourth consecutive month of deflationary CPI readings, at -0.3% y/y. This marks a tightening in real eurozone interest rates, which contrasts to the pronounced negative real interest rate picture in the U.S.