Euro Firms as Steady Inflation Data Supports ECB Patience

The euro rebounded against the dollar on Tuesday following the release of final inflation data for May. The figures showed that annual inflation in the Eurozone remained steady at 2.6%, matching initial estimates and staying above the European Central Bank's (ECB) 2% target.

Core inflation, which excludes volatile energy and food prices, also held firm at 2.9%. This data suggests that while inflation is cooling from its peak, the downward path remains gradual.

The ECB has been cautious in its approach to monetary easing, delivering a rate cut in May for the first time in five years. The firm inflation data supports this stance and has led markets to reprice fewer interest rate cuts for the remainder of the year.