Euro Hovers at $1.17 Ahead of ECB Meeting
The euro steadied against the US dollar at $1.17 on Wednesday as investors looked to Thursday’s European Central Bank meeting and upcoming US inflation figures for guidance on monetary policy.
The euro trades flat against the dollar, barely reacting to the appointment of Sebastien Lecornu as France’s new prime minister.
He replaces Francois Bayrou, who was ousted in a confidence vote over his budget plans Monday. The dollar continues to drive the euro-dollar exchange rate, Commerzbank’s Antje Praefcke says in a note.
The government’s collapse was also widely expected. ECB officials are widely expected to leave interest rates unchanged for a second consecutive meeting, as trade uncertainty lingers and eurozone inflation holds steady at the target for a third straight month.
But Bank of America views that rates could end up being lower than what forwards are implying, given the growth risks to the euro area economy and tighter financial conditions.
In the US, inflation is projected to have accelerated to 2.9% in August, up from 2.7% in July and the highest level since January.
Softer labor market data last week bolstered expectations of a Federal Reserve rate cut in September, with markets increasingly pricing in the possibility of a larger-than-usual move depending on the inflation outcome.
French President Emmanuel Macron appointed Sébastien Lecornu as the country’s new prime minister, following the ousting of François Bayrou in a parliamentary confidence vote over budget plans. # Euro Hovers at $1.17 Ahead of ECB Meeting Fidelity Bank Drops as Earnings Delay Stokes Pressure
