EUR/USD Price Action Remains in Limbo as Markets Await US Inflation Data
The EUR/USD has attempted to recover from its losses following the European Central Bank's (ECB) decision to raise interest rates. The deposit rate was increased from 2.25% to 2.50%, and the main refinancing rate rose from 2.40% to 2.65%. However, the reaction to this hawkish move has been limited due to uncertainty surrounding additional rate hikes in upcoming meetings.
ECB President Christine Lagarde emphasized that economic activity across Europe has been performing better than expected, and inflation could remain above the ECB's target for an extended period. She noted that the energy shock from the Middle East conflict may not have fully affected the European economy, but it remains a challenge.
The market is now waiting for tomorrow's release of the U.S. Consumer Price Index (CPI) report, which could alter expectations surrounding the Federal Reserve and impact the dollar's strength. The EUR/USD price action has been characterized by indecision, with no clear directional bias in recent trading sessions.