Euro holds firm ahead of key inflation data

The euro steadied just below the $1.16 mark, hovering near its strongest level since mid-November, as investors prepared for a data-heavy end to the month, including crucial inflation releases from Europe’s largest economies on Friday.

On the policy front, the European Central Bank is widely expected to keep interest rates unchanged through 2026, supported by a resilient economic backdrop and inflation trending toward its target.

While ECB officials said the Bank “is in a good place,” they acknowledged persistent price pressures in groceries and services, with Joachim Nagel stressing the need for continued vigilance.

Across the Atlantic, softer-than-expected US economic data and dovish remarks from several Federal Reserve officials strengthened expectations for a third Fed rate cut this December, underscoring the growing divergence between the ECB and the Fed.