The dollar, which has already fallen substantially in November, has a historic tendency to weaken into the year-end, which could be a positive signal for EUR/USD, MUFG said.

“There is a seasonal bias that is quite compelling for EUR/USD in December.”

In 14 Decembers in the last 20 years EUR/USD gained an average of an “impressive” 2.6%, MUFG said.

Even excluding December 2008, when EUR/USD gained 10.1%, the average gain over the other 13 occasions was still 2%.

Weaker-than-expected inflation data from both the eurozone and individual countries in the bloc this week have caused the euro to reverse a clear upward trend over the past month, DZ Bank Research said.

“To the detriment of the euro, this [the weaker inflation data] has reinforced the market’s expectations of key interest rate cuts,” it said.

Money market forwards are pricing a first eurozone interest-rate cut in April, according to Refinitiv data.

The U.S. ISM business manufacturing purchasing manager index due at 1500 GMT will be the next key data to watch, DZ Bank Research said.