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Euro gives back gains versus dollar as Eurozone data boosts ECB pause odds
EUR/USD slipped back to about 1.1430 from 1.1475 after Germany, France, and Italy data pointed to slower inflation and weaker activity.
The euro reversed much of its earlier strength against the US dollar on Friday, pulling back toward 1.1430 from session highs near 1.1475, leaving the pair roughly flat on the day, according to FXStreet.
FXStreet linked the move to softer Eurozone releases, including Germany’s final June HICP inflation cooling to 2.4% year over year from 2.7% in May, with monthly inflation contracting 0.2%. France’s CPI and Italy’s industrial output also came in around expectations, with Italy reporting a 0.3% contraction in May after a 0.4% increase in April.
Together, the data suggested moderating price pressures alongside sluggish economic activity, FXStreet said, which is seen increasing the likelihood that the European Central Bank keeps interest rates unchanged at its July meeting.
Meanwhile, FXStreet pointed to geopolitical uncertainty and higher oil prices as a drag on euro recovery, noting US and Iran have halted hostilities but the Strait of Hormuz remains effectively closed, with no clear plan to reopen it.