The euro experienced a surge, exceeding $1.17, fueled by a combination of the European Central Bank’s (ECB) stance and a weakening dollar. Fresh data from the US, including inflation and jobless claims, have increased expectations for potential Federal Reserve rate cuts later in the year, contributing to the dollar’s downturn.
- The euro climbed above $1.17.
- The ECB left rates unchanged for a second straight meeting.
- ECB President Lagarde indicated growth risks are now more balanced.
- Lagarde stated the disinflationary process is “over.”
- Eurozone GDP growth is projected at 1.2% in 2025, 1.0% in 2026, and 1.3% in 2027.
- Inflation forecasts were slightly raised: 2.1% in 2025, 1.7% in 2026, and 1.9% in 2027.
The recent performance and future projections for the euro are encouraging, particularly given signals that the ECB is unlikely to cut rates anytime soon. Furthermore, improved GDP forecasts coupled with controlled, albeit slightly increased, inflation expectations paint a picture of moderate but sustained economic expansion. These factors suggest a potentially stronger and more stable currency in the medium term.