EUR/USD is extending its gains for the fourth straight session, trading near 1.1780 during Asian hours on Tuesday. The Euro (EUR) is strengthening as markets await the release of Eurozone Industrial Production figures for July and Germany’s ZEW Economic Sentiment Survey for September.
Support for the common currency comes from hawkish remarks by European Central Bank (ECB) officials. On Tuesday, ECB board member Isabel Schnabel stated that Eurozone interest rates are “in a good place” but warned that upside inflation risks remain dominant. She also noted that growth is likely to exceed potential, with robust domestic demand offsetting weaker exports.
Meanwhile, ECB policymaker Peter Kazimir cautioned on Monday that policy should not be altered based on “small deviations” from the inflation target. He also highlighted that rateaders are still pricing in further easing through 2026 to mitigate recession risks.
Attention will now turn to the Fed’s Summary of Economic Projections (SEP) and the ‘dot plot,’ which will provide insight into policymakers’ expectations for the federal funds rate in the coming years.
