EUR/USD rises to near 1.0550 after rebounding from yearly lows

• EUR/USD gains ground as the US Dollar Index pulls back from a yearly high of 107.06.

• Fed’s Powell stated that US economic performance has been "remarkably good," allowing lowering rates gradually.

• The ECB’s October Monetary Policy Meeting Accounts indicated increasing consideration of rate cuts with caution about domestic inflationary pressures.

EUR/USD breaks its five-day losing streak, trading around 1.0540 during the Asian session on Friday. This rebound is likely due to a downward correction in the US Dollar (USD) following comments from Fed Chair Jerome Powell. Powell stated that the recent performance of the US economy has been "remarkably good," allowing the Federal Reserve the flexibility to gradually lower interest rates.

Additionally, the US Producer Price Index (PPI) rose by 2.4% year-over-year in October, up from a revised 1.9% increase in September (previously 1.8%) and surpassing market expectations of 2.3%. Meanwhile, the Core PPI, which excludes food and energy, increased by 3.1% YoY, slightly above the forecasted 3.0%.

The US Dollar Index (DXY), which tracks the US Dollar's performance against six major currencies, has pulled back from its yearly high of 107.06 recorded on Thursday. This decline is attributed to a slowdown in "Trump trades." At the time of writing, the DXY trades near 106.80.

European Central Bank (ECB) board member Isabel Schnabel stated on Thursday that interest rate changes should remain the ECB's primary policy tool, while bond purchases and forward guidance should be used more sparingly.

The ECB’s October Monetary Policy Meeting Accounts indicated increasing consideration of rate cuts. However, ECB officials remain cautious about domestic inflationary pressures, citing strong wage growth and sluggish labor productivity. The ECB emphasized the need to gather more data before implementing any policy changes.