Investors await ECB’s rate decision and Lagarde’s press conference amid USD weakness driven by inflation and geopolitical risks.
EUR/USD climbed to 1.1410 in Asian trading, extending gains for a second day ahead of the European Central Bank’s policy announcement. The ECB is expected to keep its deposit facility rate at 2.25%, with markets focusing on President Christine Lagarde’s guidance for future moves.
The US Dollar faces pressure from rising energy costs and mixed economic signals, while Fed policy uncertainty under new Chair Kevin Warsh adds to volatility. Safe-haven demand may limit USD downside as Middle East tensions escalate, disrupting oil transit routes.
Geopolitical risks intensified after Iran-backed attacks on Saudi oil tankers in the Red Sea, heightening supply concerns. Traders are balancing inflation fears against softer US economic data ahead of the Fed’s next meeting.