In the Asian session on Thursday (June 1), EUR/USD fell slightly, temporarily reporting 1.0689, a drop of 0.01%. Economist Franziska Palmas said falling inflation in Germany, along with data from France and Spain, supported the case for limited further ECB tightening.
The latest from the European Central Bank:
Services inflation edged down to 4.5 percent from 4.7 percent, she said, though that partly reflected the reintroduction of cheap fares, suggesting price pressures in services remained strong. In fact, while ECB doves could use May’s inflation data to argue that the ECB should end its tightening cycle, hawks would undoubtedly point to sticky service sector inflation and tight labor markets, she said. She added, however, that the ECB may be content with raising rates two times by 25 basis points as long as core inflation gradually eases.
