The euro rises against the dollar as traders price in potential European Central Bank rate increases ahead of US inflation data.
The EUR/USD pair advanced to 1.1545 in early European trading on Tuesday, supported by growing expectations of further European Central Bank rate hikes. Market participants anticipate a more aggressive monetary policy stance from the ECB to combat inflation.
Prior to this move, the pair had traded in a narrower range, with recent sessions showing limited volatility. Analysts note that the ECB’s hawkish signals contrast with mixed expectations for US Federal Reserve policy, adding to the euro’s strength.
Traders are now focused on upcoming US Consumer Price Index data, which could influence the Fed’s next steps and impact the currency pair’s trajectory.