FX.co ★ Euro Trades Around $1.12

The euro recently hovered around $1.12, bouncing back from the one-month lows seen on May 12th, following the US and China's announcement of a 90-day truce, coupled with reduced tariffs. Although this tariff reduction initially ignited optimism over a potential de-escalation in the trade conflict, that optimism has since waned, and investors are now eagerly anticipating any further developments. Concurrently, renewed apprehensions about a potential slowdown in the US economy have impacted the dollar negatively. On the monetary policy spectrum, the European Central Bank is anticipated to further lower borrowing costs in June, with the possibility of continued reductions thereafter. ECB Governing Council member Martins Kazaks indicated that the cycle of rate cuts might conclude soon if inflation aligns with projections to reach 2% this year. In April, inflation within the Eurozone remained steady at 2.2%, with core inflation climbing to 2.7%. Meanwhile, the GDP growth for the first quarter was revised downward to 0.3%, from a previous estimate of 0.4%.