Euro Holds Above US$1.14, Markets Await ECB Decision
The euro held steady just above US$1.14 against the US dollar. Market participants are now shifting their focus to the European Central Bank (ECB) policy meeting on Thursday.
After raising interest rates in June, the first in three years, the ECB is expected to keep rates unchanged at this meeting. Policymakers are also expected to remain cautious in assessing the direction of inflation and regional economic growth.
However, the market still expects two additional interest rate hikes from the ECB by early 2027. These expectations are driven by rising crude oil prices, which could further depress inflation in Europe.
Investors are also monitoring the possibility of a resumption of peace talks between the United States and Iran following the recent escalation in the Middle East. Ongoing tensions are raising concerns about disruptions to global oil supplies.
In terms of market impact, the euro has the potential for limited movement ahead of the ECB decision. If the ECB sounds more hawkish due to the risk of energy inflation, the euro and European bond yields could receive support. However, if Middle East tensions continue to push oil prices up, pressure on the European economy as an energy importer could increase again and limit the euro's strength. (asd)
Source: Newsmaker.id
