The euro has recovered composure after dipping to three-week lows in late April, and it is broadly stable against the pound while edging higher against the dollar. The ECB’s decision to hold rates last week was unanimous, but the tone around it was notably more hawkish than previous meetings – a June hike was discussed, and markets have moved quickly to price in further increases across the year. Eurozone growth is sluggish, expanding by just 0.1% in the first three months of the year against expectations of 0.2%, but the ECB appears more worried about inflation staying high than about growth staying low. Eurozone retail sales data on Wednesday will be the next test of consumer resilience.
EUR: Euro weakens but hike conversation has started
Christopher Nye
on May 5th, 2026 
