The world economy is changing. The US dollar is moving a lot. This is happening because economic news is mixed. The Euro is going down. Different central banks have different plans. This makes things difficult for investors.
In Europe, the European Central Bank (ECB) kept interest rates at 2%. They did not say what they will do next. ECB President Christine Lagarde was quiet about future rates. This has made the Euro weaker against the dollar. The Euro has lost money for four days. The ECB thinks the economy will grow 1.4% in 2025. However, some news from Germany is worrying. Consumer confidence in Germany is very low. Prices for goods made in factories are not changing.
The US economy has different news. The latest jobs report shows the job market is slowing. But, inflation is getting better. The Consumer Price Index (CPI) shows inflation is 2.7%. This is lower than before. However, some people think the numbers might not be exactly right. US shop sales did not change in October. But sales in a special group of shops were higher. This shows some strength.
The US Federal Reserve also made changes. They cut interest rates by 0.25%. Fed Chair Jerome Powell said the jobs market is softer. This was why they cut rates. However, the Fed's ideas and what people expect are different. Traders think there will be more rate cuts. Some economists think the job numbers might be too high.
The Bank of England (BoE) might also change its plans. They kept rates at 4.00% in November. Many people expect them to lower rates soon. Traders think the BoE will cut rates in 2026. These different plans from central banks are causing currency markets to move.