"EUR/USD recorded its second consecutive recovery session, currently trading around the 1.1900-1.1920 range, as the US dollar weakened again and US Treasury yields moderated. This rebound reflects an adjustment in market expectations regarding monetary policy, as investors temporarily reduced USD holdings ahead of a series of key economic data releases. From the Eurozone side, fundamental factors have generally yet to show a clear improvement."
"Eurozone inflation declined to 1.7% in January 2026, below the European Central Bank's (ECB) 2% target, while economic growth continues to face challenges, particularly in core economies such as Germany and France. This increases the likelihood that the ECB may further extend monetary easing should inflation remain weak. The ECB continues to maintain a cautious stance, prioritizing stability over policy tightening."
EUR/USD moved up to the 1.1900-1.1920 range as the US dollar weakened and US Treasury yields eased. Investors shifted expectations on monetary policy and trimmed USD holdings ahead of key data releases. Eurozone fundamentals remain soft: inflation fell to 1.7% in January 2026, below the ECB’s 2% target, and growth is strained in core economies like Germany and France. The ECB maintains a cautious stance and may extend easing if inflation stays weak, while sensitivity to exchange-rate strength reduces incentive to support rapid euro appreciation. Recent euro gains are mainly USD-driven.
Read at London Business News | Londonlovesbusiness.com
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