The euro climbed above $1.180, its strongest level since August 2021, supported by signs that Eurozone inflation has stabilized. Eurostat reported June inflation at 2%, matching the ECB’s target and up slightly from May’s 1.9%. Core inflation remained steady at 2.3%, while services inflation ticked up to 3.3%.
These figures reinforce views from ECB officials that inflation is largely under control, possibly justifying a pause in interest rate cuts after eight reductions since June 2024. Meanwhile, consumer surveys show falling inflation expectations, adding to the case for holding rates steady. The euro was also buoyed by a weaker US dollar, as markets price in Fed rate cuts and anticipate progress on US-EU trade talks ahead of a July 9 deadline.
