Euro Climbs Against U.S Dollar, ECB Keeps Rates Steady
The euro climbed back to $1.17 level on Thursday on the back of a broad dollar weakness after fresh US inflation and jobless claims data reinforced expectations for Federal Reserve rate cuts this year.
U.S dollar faced broad sell pressures as inflation accelerated amidst Fed rate cut expectation. In August 2025, the US Consumer Price Index (CPI) accelerated compared to the prior month, according to inflation data.
Bureau of Labor Statistics (BLS) reported a 0.4% month-on-month increase in the headline CPI, which pushed the annual rate up to 2.9% from 2.7% in July. U.S data revealed that the slight uptick was largely driven by higher shelter costs alongside energy.
Higher inflation could raise uncertainties about Federal Reserve rates cut decision but analysts expressed view that Jerome Powell will focus more on job data.
On Thursday, the European Central Bank (ECB) left interest rates unchanged while releasing updated growth and inflation forecasts.
Policymakers struck a balanced tone, weighing steady inflation, a resilient economy, record-low unemployment, and global trade uncertainties. Officials emphasized that monetary policy will remain data-dependent, with no pre-commitment to a specific rate path.
The ECB now expects eurozone GDP to expand by 1.2% in 2025, up from June’s 0.9% forecast. Growth projections for 2026 were trimmed to 1.0%, while the 2027 outlook remained steady at 1.3%
“The ECB majority appears to be emphasising several encouraging summer developments that support a wait-and-see approach: the ‘it-could-have-been-worse’ trade deal between the US and EU, solid second quarter GDP growth, improving business sentiment indicators, and a modest uptick in August inflation”, according to ING. #Euro Climbs Against U.S Dollar, ECB Keeps Rates Steady Geregu Power Targets N12.12 billion Profit in Q4-2025
