Eurozone inflation pressures persist above ECB’s 2% goal due to Middle East supply disruptions and elevated oil prices.
Eurozone inflation is expected to remain above the European Central Bank’s 2% target for an extended period, ECB officials said. The warning follows persistent energy supply disruptions linked to Middle East tensions, including closures of key shipping straits.
The ECB held interest rates steady on Thursday, avoiding a commitment to future rate cuts. Markets had anticipated the decision, though officials emphasized upside inflation risks. The US Dollar Index (DXY) dipped slightly to 101.37 after a sharp rise driven by hawkish Fed rate hike expectations, now at 33.7% for next week.
Elevated oil prices, fueled by supply constraints, have reinforced inflation concerns globally. The EUR/USD pair traded near 1.1385, supported by a marginal USD correction after recent gains.