FX.co ★ Euro Near One-Year Low

The euro ended June at about $1.14, hovering near a one-year low, as investors focused on the ECB’s Sintra Forum and fresh inflation data from Europe’s largest economies. The main event is Wednesday’s panel featuring ECB President Christine Lagarde, with markets watching closely for signals on the central bank’s economic assessment and future policy path.

On the data front, France’s EU-harmonized consumer price inflation dropped more than expected, slowing to 2.0% in June from 2.8% in May, which had marked a two-year high. In contrast, Spain’s harmonized inflation rate held steady at 3.6%, remaining at its highest level since June 2024.

The euro is heading for a monthly loss of more than 2% against the US dollar and a 1.3% decline for the quarter. Investors increasingly expect the US Federal Reserve to raise interest rates later this year to rein in inflation against the backdrop of a still-strong labor market.

At the same time, a US–Iran ceasefire that has reopened the Strait of Hormuz has pushed oil prices and inflation expectations lower. As a result, markets have scaled back their expectations for further rate hikes by the European Central Bank and the Bank of England.