Euro Rises, Boosted by ECB’s Hawkish Comments

The EUR/USD pair recorded a 0.3% rise on Friday, supported by a decline in the dollar, which has been a positive factor for the euro in the markets recently.

The euro also received an additional boost from hawkish comments made by European Central Bank (ECB) Governing Council member Pierre Wunsch, who stated that the bank’s current policies are “finely tuned” and appropriate for controlling inflation and achieving the 2% target in the medium term.

Despite this support, weak data limited the euro’s gains, as figures for the Eurozone’s Producer Price Index (PPI) for September showed a greater-than-expected decline, which is a factor that leans toward monetary easing.

The index fell by 0.3% month-on-month and 0.6% year-on-year, marking the largest annual decline in nine months, compared to forecasts that indicated a fall of 0.1% monthly and 0.4% annually.

The euro is also benefiting from the divergence in monetary policies between central banks, as investors believe the ECB has largely ended its interest rate-cutting cycle, while the U.S. Federal Reserve is expected to make two additional rate cuts before the end of the year.