EUR/USD climbs above 1.1750 after ECB, US CPI
EUR/USD gains traction and trades above 1.1700 in the American session on Thursday after the ECB left policy settings unchanged, as widely anticipated. Meanwhile, disappointing Jobless Claims data and August inflation figures from the US weigh on the USD, helping the pair push higher.
The EUR/USD pair traded with a soft tone throughout the first half of the day, holding below the 1.1700 mark ahead of critical first-tier events. The first one was the European Central Bank (ECB) monetary policy decision. As widely anticipated, the central bank left interest rates unchanged.
Still, the ECB published fresh economic projections, which weighed on the Euro (EUR). Policymakers now see headline inflation averaging 2.1% in 2025, 1.7% in 2026, and 1.9% in 2027. For inflation excluding energy and food, they expect an average of 2.4% in 2025, 1.9% in 2026, and 1.8% in 2027. The economy is projected to grow by 1.2% in 2025, revised up from the 0.9% expected in June. The growth projection for 2026 has been slightly lowered to 1.0%, while the projection for 2027 remains unchanged at 1.3%.
The EUR/USD pair fell towards fresh daily lows in the 1.1660 area, but showed little signs of life ahead of the next major event: the United States (US) Consumer Price Index (CPI). The figures were pretty much in line with expectations, as the annual CPI rose to 2.9% in August from 2.7% in July. The core annual reading printed at 3.1%, both meeting expectations. On a monthly basis, the CPI rose 0.4% following the 0.2% increase recorded in July.
The US Dollar (USD) fell with the news, pushing EUR/USD back above the 1.1600 mark, as inflation data undermined the odds for a larger Federal Reserve (Fed) interest rate cut when the central bank meets next week. As the dust settles, speculative interest has fully priced in three Fed rate cuts by the end of 2025.
Source: fxstreet
