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EUR/USD halts its five-day losing streak, trading around 1.1490 during the Asian hours on Wednesday. The currency cross inches higher as the Euro (EUR) receives support as traders expect the European Central Bank (ECB) to adopt a cautious stance in its upcoming policy meeting.

The ECB decided to leave interest rates unchanged for the third consecutive time in the October policy meeting last week. The central bank noted that the inflation outlook remains broadly stable, the economy continues to grow, and uncertainty persists. Earlier data indicated that Eurozone inflation eased to slightly above the ECB’s 2% target, while third-quarter GDP growth surpassed expectations. Additionally, October business surveys indicated an improvement in overall sentiment.

ECB policymaker Francois Villeroy de Galhau noted that the central bank is in a good position after the October policy decision. However, Villeroy added that this position is not a fixed one. Governor of the Central Bank of Latvia, Martins Kazaks, said that risks to inflation and growth in the Eurozone are more balanced. Kazaks added that the central bank would act when necessary but should avoid reacting hastily.

The US Dollar (USD) faces some challenges amid the ongoing US government shutdown. The deadlock has now entered its sixth week and is poised to become the longest federal funding lapse in US history after the Senate once again failed to pass a short-term funding bill. The most recent attempt to resolve the standoff, Republican-backed temporary legislation, was rejected by the Senate for the 14th time on Tuesday.

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