Euro Surges Against USD Amid Softer US Inflation Data

The euro experienced a surge against major currencies in European trading on Friday, marking its second consecutive day of gains against the US dollar. This upward trend follows softer-than-expected US inflation data that reduced expectations for interest rate hikes this year.

Meanwhile, the recent rise in global oil prices has put pressure on European Central Bank policymakers to consider a potential interest rate hike in September. Market analysts now assign a 50% probability of a 25-basis-point increase, up from 35%, based on current inflationary pressures.

The US Dollar Index declined by over 0.1% as the dollar continued to weaken against major currencies. This decline was sparked by US inflation data showing easing pressure on Federal Reserve policymakers, leading to reduced expectations for interest rate hikes this year.