Powell shocked the market, how long can the euro survive?

12 hours ago

12 hours ago

The euro traded slightly lower against the dollar on Tuesday at $1.1124, not far from a one-week low hit on Monday. The euro's recent decline was largely influenced by German inflation data. German inflation has fallen to its lowest level since early 2021, data showed, reinforcing market expectations that the European Central Bank will cut interest rates again this month.

European Central Bank President Christine Lagarde said in a speech to the European Parliament that "recent developments reinforce our confidence that inflation will return to target in the future." This means that market expectations for a rate cut in October have increased further.

Deutsche Bank changed its outlook for the ECB in a note on Tuesday, now believing the central bank will cut rates in October instead of December as previously forecast. The change suggests that the ECB may act sooner to counter downward inflation pressures, which further weighs on the short-term performance of the euro.

G_James9

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