The euro maintained its position above $1.13 during the first week of May, supported by receding trade anxieties stemming from statements made by U.S. President Trump regarding ongoing negotiations with China. Market participants were also keenly awaiting monetary policy announcements from several central banks, including the Federal Reserve and the Bank of England.
- The euro held above $1.13.
- Easing trade tensions with China supported the euro.
- Strong Eurozone inflation data fueled expectations of ECB rate cuts.
- Headline inflation remained steady at 2.2% in April.
- Services inflation increased to 3.9%.
- Core inflation rose to 2.7%.
- 60 basis points in rate cuts from the ECB are expected by year-end.
The stability of the euro, despite expectations of rate cuts from the European Central Bank, suggests underlying strength. Inflationary pressures within the Eurozone, particularly in services and core sectors, are contributing to the complex economic landscape. These factors are influencing the market’s anticipation of monetary policy adjustments and could lead to interesting market movements.