The euro rallied in European trade on Monday against a basket of major rivals, starting its recovery from two-week lows against the dollar and on track for the first profit in four days as European leaders agreed to present urgent plans to the US to achieve peace in Ukraine.
Additionally, after bullish remarks from some European Central Bank officials, the odds of a March ECB interest rate cut dropped, with traders awaiting important eurozone inflation data later today to gather more clues.
The Price
The EUR/USD pair rose 0.5% today to $1.0423, with a session-low at $1.0399.
The euro fell 0.25% on Friday, marking the third loss in a row, and plumbing a two-week trough at $1.0360.
The euro lost 0.8% last week against the greenback, the second weekly loss in a row after Trump’s tariff threats.
Ukraine Peace Deal
An emergency European summit was held in London and attended by 18 European leaders, including Ukrainian president Volodomyr Zelensekiy, to show strong support to Ukraine and develop a peace deal to present to Washington.
UK Prime Minister Keir Starmer said European leaders agreed on the items of the plan to support Kiev and achieve fair and lasting peace, while providing strong security guarantees.
Such momentum towards a peace resolution to the Ukrainian war has served to boost the euro.
European Rates
European Central Bank President Christine Lagarde said recent positive developments in the eurozone indicate a rate cut isn’t an urgent matter.
ECB member Isabel Schnabel asserted the importance of not rushing into taking more monetary easing steps, as interest rates are approaching neutral levels already.
Following such remarks, the odds of an ECB 0.25% rate cut in March fell from 65% to 55%.
European Inflation
Later today, investors await important eurozone inflation data, expected to provide strong clues on the odds of an ECB interest rate cut in March.
Eurozone’s consumer prices are expected up 2.3% in February, slowing down from 2.5% in January.
