The euro is soft against the dollar and the pound, partly due to inflation, which is not yet high enough to pressure the European Central Bank into tightening monetary policy.
Inflation in Europe is high but still under 3%, meaning that ECB officials have not felt the need to take action with monetary policy. This inactivity could continue to weigh on the single currency, especially as the Federal Reserve shifted its stance slightly last week, giving the dollar a boost.
Data released yesterday revealed that Germany’s consumer price inflation rate is expected to ease to 2.3% year-on-year in June 2021, from a near 13-year high of 2.5% hit in May.
The latest inflation rate figures for the Eurozone as a whole will be released later today.
