Euro Surges Above $1.1500 as Cooling Inflation Data Weighs on USD

The Euro has gained strength above $1.1500 as the latest inflation data suggests cooling prices, weighing on the US Dollar.

In a move that could impact global markets, the core Producer Price Index (PPI) rose only 0.2%, falling short of market expectations at 0.3%. The headline PPI climbed 4.7% year-over-year in July, while the core PPI rose 4.2% during the same period.

This development has led to a decrease in the probability of a US rate hike at the September meeting, now priced at 34.8%, down from 40% immediately after the data release. Meanwhile, the European Central Bank is expected to raise interest rates by 25 basis points (bps) at its own September monetary policy meeting.