EURAUD fundamental analysis November 2025Euro/Australian DollarFX:EURAUDHalcyonFXcoEuro (EUR): Neutral to Bullish as ECB Signals End of Cuts Monetary Policy Stance The European Central Bank kept its key interest rates unchanged at its September meeting, with the deposit rate remaining at 2.00%. This marks the second consecutive hold following the June cut, and ECB President Christine Lagarde made clear the central bank is "in a good place" and "comfortable" with current policy settings. Critically, the ECB provided no forward guidance on future moves, and market pricing assigns less than 50% probability to any further cuts through 2026. Economic Backdrop Eurozone inflation remains close to the ECB's 2% target, with headline inflation at 2.1% and core inflation at 2.3% as of August 2025. The ECB's updated projections show inflation averaging 2.1% in 2025, 1.7% in 2026, and 1.9% in 2027—slightly below the 2% medium-term target. Growth forecasts have been revised higher to 1.2% for 2025 (from 0.9% in June), though the 2026 projection was trimmed slightly to 1.0%. Lagarde characterized the inflation risks as "more balanced" compared to June, and notably stated that "the disinflationary phase is over". This hawkish tone suggests the ECB has completed its rate-cutting cycle and will maintain restrictive policy for an extended period. November Outlook: Neutral to Bullish The Euro is positioned to gain against currencies whose central banks continue easing, particularly the US Dollar, British Pound, and commodity currencies. The October 30 ECB decision confirmed the hold, reinforcing the euro's positive momentum. EUR/USD forecasts for year-end range from 1.15 to 1.20, with the consensus around 1.16-1.17. The euro's relative strength is underpinned by narrowing rate differentials with the Fed and stabilizing eurozone growth dynamics. Australian Dollar (AUD): Very Bullish on Inflation Surprise Reserve Bank of Australia Stance The Australian Dollar received a powerful boost from the September quarter inflation data released on October 29, which delivered a significant upside surprise. Headline CPI accelerated to 1.3% quarter-on-quarter and 3.2% year-on-year, well above the RBA's 2-3% target midpoint. More importantly, the RBA's preferred trimmed mean measure climbed 1.0% quarterly (beating 0.8% expectations and the RBA's August forecast of 0.6%), pushing the annual rate to 3.0%—the first uptick since December 2022. RBA Governor Michele Bullock had explicitly stated earlier in the week that a 0.9% quarterly rise in trimmed mean inflation would be viewed as a "material miss". At 1.0%, the threshold was decisively crossed. Bullock also described the labor market as "a little tight" despite unemployment rising to 4.5%, and emphasized the RBA's unwillingness to "leap at a single number". Rate Cut Expectations Pushed Back The inflation surprise has dramatically reshaped rate cut expectations. Markets now price only 2 basis points of easing for the November 4 meeting, and the first 25 basis point cut has been delayed from February 2026 to May 2026. This represents a stark shift from earlier expectations for near-term easing. The RBA cash rate remains at 3.60%, providing a substantial yield advantage over other major central banks. November Outlook: Very Bullish The Australian Dollar is the clear standout for November strength. AUD/USD surged to a three-week high of 0.6607 following the inflation data, and technical analysis suggests further upside potential toward 0.6706. The currency benefits from multiple tailwinds: delayed rate cuts relative to other central banks, particularly the Fed; buoyant risk sentiment following the preliminary US-China trade framework; and strong commodity prices, including copper near three-month highs. Against the weaker commodity currencies like CAD and NZD, the Australian Dollar is exceptionally well-positioned. Verdict The EUR is in a comfortable position altogether, however, AUD seems unstoppable this year. We expect this development to continue in November leading to SELL recommendation for EUR/AUD. If you are a user of the HalcyonFX.co trading bot you should set the trade direction on EUR/AUD to Sell only for the time being in order to minimize drawdown risks.