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14/06/24
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EUR Drops to Six-Week Low
On Friday, the euro extended its losses, and EUR/USD traded at about 1.0675, down 0.59% for the day in the European session. The euro is 1.17% lower this week and has fallen to its lowest level since May 1.
In May, France’s inflation level dropped to zero, the same as the preliminary estimate and down from April’s 0.5% gain. France is the second-biggest economy in the eurozone and the inflation downtrend will be welcomed by the European Central Bank.
Last week, the central bank cut rates for the first time since its rate-hiking cycle started two years ago. ECB policymakers will be monitoring inflation data closely and may implement another cut this year if inflation continues to drop towards the target of 2%.
Eurozone inflation in April rose by 2.4%, the same as in March.
Later on Friday, ECB President Lagarde will speak at an event in Croatia and investors will be watching for clues as to the ECB’s rate path going forward. Although another cut in July is not likely, a signal from Lagarde that more rate cuts are on the table may boost the euro.
The producer price index in the US was 0.2% higher, lower than the April reading of 0.5% and the market estimate of 0.1%.
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