EUR/USD Holds Steady Ahead of US CPI Data Amid ECB Hawkish Tone
The EUR/USD pair remains steady around 1.1610 in the early Asian session on Friday, as traders weigh the recent ECB hike and impending US CPI data.
On Thursday, the European Central Bank (ECB) raised its deposit facility interest rate to 2.50%, marking its second increase this year. ECB President Christine Lagarde emphasized that the ongoing conflict in the Middle East and Russia's war on Ukraine will keep headline inflation above target for an extended period.
This hawkish tone suggests further rate hikes are possible, which could support the euro in the near term, according to Roman Ziruk, an FX strategist at Ebury. Across the pond, hotter US Producer Price Index (PPI) inflation data has increased bets for a US Federal Reserve (Fed) rate hike next week, with markets pricing in nearly 70% odds of an increase.