The EUR/USD pair trades modestly higher around 1.1830 during early European trading on Wednesday. However, upside momentum may remain capped as investors stay cautious following the swift resolution of a partial US government shutdown. Market attention later in the session will turn to the preliminary Eurozone Harmonized Index of Consumer Prices (HICP) data, which could influence near-term price action.
According to reports, US President Donald Trump signed legislation on Tuesday to end the partial government shutdown that began over the weekend. The bill narrowly passed the House of Representatives with a 217–214 vote. This development, combined with Trump’s nomination of Kevin Warsh as the next Federal Reserve Chair, may lend support to the US Dollar by easing concerns surrounding fiscal uncertainty and central bank independence.
Meanwhile, focus is shifting toward the European Central Bank’s (ECB) policy decision scheduled for Thursday. The ECB is widely expected to leave interest rates unchanged for the fifth straight meeting at its February policy gathering. Traders will closely follow ECB President Christine Lagarde’s press conference for guidance on the future rate outlook. Any hawkish signals could provide fresh support to the euro against the US Dollar.
“Lagarde is likely to emphasize that the euro-area economy remains on solid footing, though risks are still elevated,” said Swedbank economist Nerijus Maciulis. “The opening weeks of 2026 have clearly shown how fragile global trade agreements continue to be.”
