Euro builds on gains towards four-week highs as Eurozone inflation figures run hot

  • Having rebounded from lows around 1.1100, EUR/USD pushes towards its four-week high of 1.1280.
  • October consumer inflation in the Eurozone reached a three-year high, preliminary figures showed.
  • A decisive Democratic victory in the US midterm elections continues to weigh on the USD.


Strong Eurozone inflation figures, alongside a decisive Democratic victory in the US midterm elections, are helping the Euro (EUR) gather pace in its recovery against the US Dollar (USD) on Wednesday. With a gain of more than 0.6% on the day, EUR/USD reached session highs just a few pips short of the upper end 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) showed Eurozone inflation at its highest in three years, according to data published earlier on Wednesday. High energy prices drove the acceleration from September’s 3.8%.

By increasing pressure on the European Central Bank (ECB) to tighten monetary policy further in the coming months, the inflation figures have outweighed investor disappointment over the downward revision to October’s HCOB Services Purchasing Managers’ Index (PMI), published earlier in the day.

US Dollar comes under pressure after Trump’s midterm defeat

Meanwhile, reports of a decisive Democratic victory in Tuesday’s US midterm elections are leaving the US Dollar struggling. Both chambers have come under Democratic control, with the party also winning over historically Republican strongholds, including Kansas and Texas.

Technology shares have faced additional pressure as investors worry that the Democrats will introduce regulation of the AI sector and curb data centre construction plans. Those concerns have also lifted demand for safe-haven government bonds.

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

Economic Data Release

Harmonised Index of Consumer Prices: Monthly Change (MoM)

Published each month 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 each country’s contribution weighted, makes the index harmonised. The MoM reading measures the change in goods prices between the reference month and the preceding month. A higher reading is generally regarded as supportive of the Euro (EUR), whereas a lower reading is viewed as negative for the currency.

Find out more.

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

Release frequency: Monthly

Actual reading: 0.4%

Consensus estimate: -

Previous reading: 0.6%

Data source: Eurostat

Economic Data Indicator

Harmonised Index of Consumer Prices (YoY) Tracks Annual Price Changes

Price movements for a representative basket of goods and services across the European Monetary Union are tracked by the Harmonised Index of Consumer Prices (HICP). Eurostat publishes the index monthly, using a common methodology across all member states and weighting each state's contribution. This consistent approach makes the index harmonised. The year-on-year (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), whereas a low reading is viewed as negative.

Find out more.

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

Publication frequency: Monthly

Reported figure: 4%

Market consensus: 4%

Prior reading: 3.8%

Data source: Eurostat