Euro Edges Higher as Germany's Inflation Accelerates Amid Dollar Correction

The Euro (EUR) edged higher against the US Dollar (USD) to trade near 1.1600 during Monday's European session, as the greenback corrected from Friday's strong gains and German inflation data showed an acceleration.

Germans' preliminary Consumer Price Index (CPI) for the current month came in at 2.4% year-on-year, up from 2.2% in the previous reading, according to Destatis.

This uptick in inflation reinforces the ECB's cautious stance on rate cuts, as policymakers have repeatedly cited sticky price pressures in the services sector.

The data reduces the likelihood of an aggressive easing cycle, providing a tailwind for the euro. A currency strategist at a major European bank noted that the market is still pricing in a couple of Fed rate cuts by year-end, and unless inflation surprises to the upside, the dollar's strength may be temporary.