ECB set to continue the fight against inflation despite its weakening

Expert market comment from senior analyst Alex Kuptsikevich of the FxPro Analyst Team: ECB set to continue the fight against inflation despite its weakening
FxPro | Před 764 dny

The euro is hovering around the $1.07 level, barely recovering above that mark on Thursday morning despite a sharper-than-expected drop in inflation. 

Eurostat’s preliminary estimate showed a decline in annual inflation in May to 6.1% from 7.0% in April. Economists had forecasted a smaller decrease to 6.3% y/y. Core inflation, which excludes volatile energy and food prices, also slowed down from 5.6% to 5.3%, confirming a downward trend. 

Earlier statistics from other indicators and CPI data from the major countries suggested similar outcomes, but it is still helpful to have confirmation from the consolidated data. 

However, we would like to stress that in these critical times, the regulator’s perception of these facts is more important than the facts themselves. As the statistics were released, ECB President Lagarde reaffirmed in her speech in Hannover that she wanted to continue the cycle of further rate hikes. 

She also said that it needed to be clarified whether the already implemented hikes were enough. The hawkish stance of the ECB is also supported by data from the labour market, where the unemployment rate fell to 6.5% in April, the lowest level since 1993. The tight labour market could create additional price pressures despite falling energy prices and slower growth in food prices. 

A strong labour market and a hawkish ECB attitude favour the single currency. We also note that the ECB only has a mandate for an inflation target, while the Fed must maintain maximum employment.

The euro area may be less sensitive to monetary policy than inflation in the US. This was evident in higher rates than in the US before 2008 and lower rates afterwards. Zero-rates era is over, so we expect a return of positive key rate differentials between Europe and the US in the coming years.

By the FxPro Analyst Team

Regulace: FCA (UK), SCB (The Bahamas)
read more
Why Silver could be the precious metal of 2025

Why Silver could be the precious metal of 2025

The gold bar is metallic yellow and slightly behind the silver bar, which is metallic white and positioned in front. Gold may still be the headline act, but silver’s no longer content playing second fiddle. In 2025, silver isn’t just glittering - it’s surging forward as one of the most exciting metals on the market.
Deriv | Před 1 dnem
Risk-on sentiment fades as tariffs return to the spotlight 

Risk-on sentiment fades as tariffs return to the spotlight 

Dollar surrenders gains posted after robust labour market report; Trump celebrates US budget bill approval; scheduled to sign it today; Most Fed members feel more comfortable as July rate cut is priced out; Oil steadies near $66, gold rally retains momentum;
XM Group | Před 1 dnem
ATFX Market Outlook 4th July 2025

ATFX Market Outlook 4th July 2025

The U.S. economy added 147,000 jobs in June, beating expectations of 110,000, while the unemployment rate fell to 4.1%. Traders are now betting that the Fed is unlikely to cut rates before September. Meanwhile, the House narrowly passed Trump's major fiscal bill by a vote of 218 to 214. U.S. stocks rallied on Thursday, hitting fresh record highs.
ATFX | Před 1 dnem
Nonfarm payrolls take center stage

Nonfarm payrolls take center stage

Slide in US private payrolls raise concerns about NFP miss - US strikes trade deal with Vietnam ahead of July 9 deadline - Pound feels the heat of fiscal shenanigans - S&P 500 hits fresh record high ahead of jobs report
XM Group | Před 2 dny
Rate Shifts Steer FX Markets as Silver Holds Strong

Rate Shifts Steer FX Markets as Silver Holds Strong

On July 3, silver stays firm above $35.40 as Fed cut bets persist. EUR/USD holds near 1.1800, while GBP/USD lingers near 1.3585 ahead of UK jobs data. JPY strengthens after BoJ signals a hawkish pause. AUD/USD slips on weak trade surplus. Focus turns to US NFP and ISM data for market direction before the US holiday break.
Moneta Markets | Před 2 dny