Euro Holds Firm as July Inflation Data Suggests ECB Patience

The Euro remained steady against major currencies after the release of July's Harmonized Index of Consumer Prices (HICP) data, confirming a slowdown in inflation and reinforcing market expectations that the European Central Bank will maintain its current policy stance.

The final data showed annual inflation rose by 2.6% in July, a slight uptick from June's 2.5%, but cooler than May's 2.7%. The core rate, excluding volatile food and energy prices, held steady at 2.9% year-on-year.

The services sector saw its annual inflation ease to 4.0% from 4.1% in June, a crucial signal for policymakers as it suggests sticky components of inflation are cooling. Energy prices remained a drag on the headline figure, reflecting base effects from previous year's volatility.