Euro firms after Ukraine talks

The euro held steady around 1.167 on Monday as investors positioned cautiously ahead of this week’s central bankers’ symposium in Jackson Hole and digested the latest diplomatic developments surrounding Washington’s efforts to end Russia’s war in Ukraine.

NATO Secretary General Mark Rutte described President Donald Trump’s meeting with Ukrainian President Volodymyr Zelenskiy and European leaders as “very successful,” noting progress in aligning Western partners on next steps.

Trump added that he had already reached out to Russian President Vladimir Putin to arrange a direct meeting with Zelenskiy, with a trilateral summit also under discussion. Markets interpreted the developments as a tentative sign of de-escalation, though the lack of a firm timetable tempered optimism.

On the monetary policy front, the euro remained stable as traders saw little reason to shift expectations for the European Central Bank. Markets are pricing no change for September after the ECB ended its year-long easing cycle in July, though lingering growth concerns keep the door open to further cuts later this year if conditions deteriorate.

Meanwhile, focus in the U.S. turned to the Federal Reserve, where softer inflation and labor market indicators have strengthened the case for monetary easing. Futures markets assign an 85% probability to a 25-basis-point cut at the September 16–17 meeting, with speculation about the possibility of an additional reduction before year-end.

All eyes are now on Fed Chair Jerome Powell’s upcoming speech at the Jackson Hole symposium, which investors hope will provide clearer guidance on the pace and scale of future policy moves. Any signal of openness to a larger half-point cut could weigh further on the dollar and lend near-term support to the euro. Conversely, a more cautious tone might curb bullish momentum in the single currency.

In the short term, the euro’s trajectory will be shaped by the interplay of U.S. policy signals and ongoing geopolitical negotiations, with markets bracing for volatility if talks between Trump, Zelenskiy, and Putin gain traction or stall.