The euro has found stability just above the $1.165 mark, maintaining its position near a one-month low encountered last week. This comes as concerns over the independence of the Federal Reserve have subsided, following resistance from several Republican lawmakers against a Justice Department criminal investigation involving Fed Chair Jerome Powell. Investors are now turning their focus towards critical forthcoming data, such as the US consumer price inflation report expected later today, to glean new insights on monetary policy.
In Europe, European Central Bank Governing Council member François Villeroy de Galhau remarked on Tuesday that the notion of an ECB rate hike this year is a "fanciful" misconception. Last December, the ECB maintained its policy rates and improved some growth and inflation projections, reinforcing market expectations for a prolonged hold on rates. Supporting this outlook, recent Eurostat data revealed a decrease in headline inflation to 2.0% in December, aligning with the ECB's target, while core inflation also eased to 2.3%.
