EUR/USD Stabilizes Following Inflation Data and ECB Rate Decision

The Euro (EUR) registered marginal losses against the U.S. Dollar (USD) on Thursday, erasing most of its gains on Wednesday.

The EUR/USD pair declined by about 0.02% to reach the 1.2177 level, following a series of fluctuations due to various factors affecting the market.

On one hand, the European Central Bank (ECB) decided to maintain interest rates and committed to the current size of the Pandemic Emergency Purchase Program (PEPP) until March 2022.

The ECB avoided talks about tapering or reversing its policies and stimulus measures amid signs of economic recovery from the coronavirus pandemic.

As for its expectations for inflation, the ECB now foresees inflation rising to 1.9% for 2021 and easing to 1.5% next year.

May’s reading of the U.S. Consumer Price Index (CPI) showed a 5% surge, prompting question marks about a change in policies by the Federal Reserve.