Euro Rises Amid Rate Cut Cautions: ECB & Fed Update
Solid ECN - The euro experienced a slight increase, going over $1.075, following a drop to a low of $1.072 on February 5th. This happened as the major central banks in Europe and the US took a careful stance on reducing interest rates. During a Financial Times interview on Wednesday, Isabel Schnabel, a member of the ECB's board, stressed the need for patience in deciding on changes to interest rates.
She pointed out the risk of inflation rising again as a concern. Additionally, ECB survey results showed that Eurozone consumers expect inflation to be at 3.2% over the next year as of December, the lowest expectation since February 2022. In the US, the anticipation for the Federal Reserve to lower interest rates soon diminished. This change in outlook was influenced by cautious remarks from Federal Reserve officials and the emergence of robust economic data.