Euro Soars Above $1.1650 as ECB Hints at Further Rate Hikes

The Euro has maintained its gains above $1.1650 due to the European Central Bank's (ECB) hawkish bias, according to a recent report by TMGM.

The ECB is expected to raise key interest rates in September, following a tightening in June to combat price pressures amid ongoing geopolitical tensions.

Markets are pricing in nearly 25% odds of the ECB deposit rate reaching 3.0% by March 2027 and about 60% chance by September, according to Reuters.

ECB Executive Board member Isabel Schnabel stated that borrowing costs will need to rise further as the lengthy conflict in the Middle East and surprisingly strong euro-zone economy pose upside risks to inflation.