The euro jumped in European trading on Monday to its highest level in two weeks against the US dollar, supported by continued weakness in the US currency as markets price in a Federal Reserve rate cut this December.

Amid ongoing uncertainty over the likelihood of a European rate cut next month, investors are awaiting Tuesdays release of key eurozone inflation data for November, seeking stronger signals on the European Central Banks potential path toward policy easing.

Price overview

EUR/USD today: The euro rose about 0.2% to $1.1616, the highest since 17 November, up from an opening price of $1.1596. The session low was $1.1589.

The euro ended Fridays session flat against the dollar for a second consecutive day.

Over November, the euro gained 0.5% against the dollar, marking its third monthly rise in the past four months, supported by the ECBs hawkish stance.

US dollar

The US Dollar Index fell around 0.2% on Monday, deepening losses for a sixth straight session and hitting a two-week low, reflecting persistent declines in the US currency against a basket of global peers.

A run of weak economic data and cautious commentary from Federal Reserve officials has driven expectations higher for a US rate cut in December, with markets waiting for additional American labor-market data due this week.

According to the CME FedWatch tool, the market is currently pricing an 87% chance of a 25-basis-point Fed rate cut in December, versus a 13% chance of no change.

European rates

Money markets are pricing around a 25% probability of a 25-basis-point European Central Bank rate cut in December.

Investors will look to tomorrows key eurozone inflation reading for clearer evidence on the ECBs policy outlook and the likely direction of monetary easing in the euro area.