FX.co ★ Euro Softens as Investors Eye ECB Guidance and US Developments

The euro experienced a slight decline, settling at $1.163, as investors shifted their attention to upcoming speeches by European Central Bank officials this week, seeking insights into future policy directions. Thursday marks the start of the ECB's pre-meeting blackout period, leading up to its interest rate decision next week. Concurrently, the US dollar strengthened modestly, buoyed by indications of diminishing trade tensions between the US and China, as well as anticipations that the US government shutdown will conclude this week. US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are scheduled to meet in Malaysia to avert a further escalation of US tariffs on Chinese imports, a strategy President Donald Trump recently labeled as "unsustainable." In financial markets, traders have increased their bets on monetary policy easing by both the ECB and the Federal Reserve, with a 25-basis-point rate cut by the ECB anticipated by July 2026 and two rate reductions by the Federal Reserve expected by the end of this year.