FX.co ★ Euro Nears Recent Highs Ahead of Confidence Vote and ECB Meeting

The euro maintained a position above $1.17, marking its strongest performance since late July. This strength is attributed to the general weakening of the dollar and cautious market behavior ahead of a significant upcoming week. In France, Prime Minister Francois Bayrou is anticipated to undergo a confidence vote on Monday, which he is largely expected to lose. This could compel President Emmanuel Macron to appoint a fifth prime minister within a span of less than two years. Meanwhile, the European Central Bank (ECB) is slated to meet on Thursday, with the prevailing expectation that interest rates will remain steady for the second time in a row. The ECB is currently assessing the implications of persistent trade uncertainties and potential repercussions from proposed U.S. tariffs, even as inflation continues to meet target levels for the third month consecutively. In the United States, investors are directing their attention towards this week's inflation report following last week's subdued labor market data, which bolstered the argument for a Federal Reserve rate cut in September. Market analysts are now considering the likelihood of a more substantial rate adjustment than usual.