The euro climbed above $1.185, trading near its strongest level since late January, after the European Central Bank signaled limited concern about the currency’s recent appreciation. At last week’s policy meeting, the ECB left interest rates unchanged and reaffirmed that inflation is expected to stabilize at its 2% target over the medium term. During the press conference, President Christine Lagarde said the euro area’s inflation outlook remains in a “good place,” downplaying the euro’s recent rally. She cautioned, however, that incoming data could be volatile in the months ahead and should not drive policy decisions on their own.
At the same time, the US dollar weakened ahead of key US jobs and CPI data due later this week. The greenback also came under pressure after the Japanese yen strengthened, following a landslide victory for Prime Minister Sanae Takaichi’s ruling coalition in Japan’s Lower House election.
