EUR/USD Holds Near Highs
Newsmaker.id - EUR/USD held firm in Asian trading on Thursday morning, July 16, 2026. The euro traded around US$1.1465–US$1.1468, not far from its highest level in almost a month, after a weakening US dollar gave the single European currency room to continue its recovery.
Pressure on the dollar increased after the US producer price index fell 0.3% in June, following weaker-than-expected consumer inflation data. This series of data reduced the odds of a Fed rate hike in July to around 10%, from 45% at the start of the week, reducing the dollar's appeal and supporting EUR/USD.
The euro was also supported by expectations that the European Central Bank could continue its policy tightening. Markets are pricing in an ECB interest rate hike in September after the central bank raised rates for the first time in three years in June. However, some ECB officials remain cautious as there is no strong evidence that rising energy prices have spread widely throughout the economy.
However, EUR/USD's gains are potentially limited by the escalating conflict between the United States and Iran, which has pushed Brent oil prices closer to US$85 per barrel. The energy surge could weigh on the eurozone's economic outlook while supporting the dollar as a safe haven asset. Investors next await US retail sales data for fresh clues on the Fed's policy direction.
(CP)
