FX.co ★ Euro Climbs to One-Month High

The euro climbed above $1.145, trading near its highest level since June 19, as weaker-than-expected US inflation data pressured the dollar and strengthened expectations of further policy tightening by the European Central Bank. The ECB, which delivered its first rate increase in three years in June, is widely anticipated to raise rates again. Markets have fully priced in a hike for September, with another increase projected by spring 2027. Still, recent remarks from policymakers including Piero Cipollone and Martin Kocher point to a more cautious stance, making a rate move in July unlikely. In the United States, producer prices unexpectedly declined in June for the first time in nearly a year, while consumer prices posted their first drop since 2020, largely due to lower energy costs. These developments have eased pressure on the Federal Reserve to tighten policy this year. At the same time, investors remained alert to rising tensions in the Middle East following additional US strikes on Iranian targets.