FX.co ★ Euro Steady Around $1.18 as Inflation Data Shapes ECB Outlook

The euro hovered around $1.18 as investors assessed new inflation data and its implications for European Central Bank policy. Regional CPI readings from Germany pointed to easing price pressures in February, while France’s EU-harmonized inflation rate quickened to 1.1% from 0.4% in January, surpassing the 0.7% consensus forecast. In Spain, HICP inflation climbed to 2.5%, up from 2.4% in January and above expectations of 2.3%. Money markets now price in only about a 30% chance of an ECB rate cut by December. Addressing the European Parliament on Thursday, ECB President Christine Lagarde said headline inflation is projected to move toward the 2% target over the medium term, noting that food inflation—crucial to consumer sentiment—is expected to remain slightly above 2% later this year. She also stated that while the ECB will keep a close watch on currency developments, it has no plans for direct intervention in foreign exchange markets.