Key facts
- The euro rose towards a one-week high ahead of a European Central Bank policy decision.
- Markets anticipate the ECB will hold interest rates steady but may signal a future hike.
- Euro-area inflation reached 3.2% in May, the highest in over two and a half years.
- Investors are pricing in a 25-basis-point ECB rate increase at the June 11 meeting.
- The Japanese yen showed minimal recovery against the dollar.
The euro edged higher, approaching a one-week peak as markets awaited a European Central Bank policy decision. While interest rates are expected to remain unchanged, indications of a potential September hike have emerged due to persistent inflation risks. The euro climbed above $1.16, with investors preparing for a likely 25-basis-point rate increase at the June 11 meeting, and potentially two or three hikes by year-end.