The euro edged slightly higher in European trading on Monday against a basket of major currencies, attempting to recover from a three-month low versus the US dollar amid renewed buying at lower levels.

However, the single currency remains under downward pressure after eurozone inflation slowed in October, easing price pressures on European Central Bank policymakers and reinforcing expectations for an interest rate cut in December.

Price Overview

EUR/USD rose 0.1% to 1.1538 from an opening level of 1.1528, after touching a session low of 1.1522.

The euro closed Friday down 0.25% against the dollar its third consecutive daily decline hitting a three-month low of 1.1521 following softer-than-expected inflation data.

For October, the euro lost 1.7% versus the dollar, marking its first monthly decline in three months amid political tensions in France and heightened geopolitical risks in Eastern Europe.

US Dollar

The dollar index slipped 0.1% on Monday, pulling back from a three-month high of 99.84 points, reflecting a pause in the greenbacks rally against major and minor counterparts.

Aside from profit-taking, the dollar eased ahead of key US manufacturing data for October, which could offer fresh clues about economic momentum in the fourth quarter.

European Interest Rates

Data released Friday showed headline eurozone inflation slowed in line with expectations in October, while core inflation remained steady reducing pressure on the ECB to maintain a restrictive stance.

Following the report, money markets raised the probability of a 25-basis-point ECB rate cut in December from 10% to 25%.

Investors are now awaiting additional economic releases across Europe, along with fresh comments from ECB officials, to reassess the likelihood of near-term policy easing.