FX.co ★ Euro Holds Above $1.175 as Inflation Picks Up and ECB Signals Steady Rates

The euro maintained a position above $1.175 following the release of Eurostat data, which confirmed a rise in Eurozone inflation for September. Concurrently, the U.S. dollar weakened amid the onset of the first U.S. government shutdown in seven years. Inflation in the Eurozone increased to 2.2%, up from August's 2.0%, slightly surpassing the European Central Bank’s (ECB) midpoint target. This rise occurred as energy prices declined at a slower rate. The data bolstered expectations that the ECB would refrain from reducing interest rates at present. ECB Vice President Luis de Guindos stated on Tuesday that the current interest rate level is "adequate," highlighting that future decisions will be made on a "meeting by meeting" basis. Additionally, on Monday, board member Gabriel Makhlouf pointed out that the "easing cycle" is nearing its end. This announcement represents the final inflation report before the ECB's meeting on October 30, where it is anticipated that interest rates will remain unchanged until new forecasts are available in December.