FX.co ★ Euro Holds at $1.18 Amid ECB Pause Signals

The euro maintained its position at $1.18, close to its peak level since August 2021, as investors analyzed statements from European Central Bank (ECB) officials following the eurozone meeting its 2% inflation target. During the ECB Forum on Central Banking, President Christine Lagarde acknowledged the June inflation figures aligning with expectations but cautioned about “two-sided risks” due to increasing economic fragmentation and rising geopolitical tensions. Other ECB representatives suggested that interest rates are likely to remain unchanged at this month’s meeting, after eight consecutive reductions in the deposit rate since June 2024, amidst persistent concerns over global trade tensions, instability in the Middle East, and the euro's recent appreciation. Additionally, the euro has been bolstered by a weaker US dollar, as markets continue to anticipate Federal Reserve rate cuts despite the ongoing uncertainty regarding the effects of tariffs imposed by US President Trump.