The euro gained ground in European trading on Monday, advancing against a basket of major currencies. This marks the euro's first positive session against the dollar in five days, fueled by optimism that it could break above the $1.1 mark amid expectations of a narrowing interest rate gap between the US and the eurozone.
Recent strong inflation data from the eurozone have lessened the likelihood of another ECB rate cut in September, while the US Federal Reserve is widely anticipated to lower rates next month.
The Price
The EUR/USD pair edged up by 0.15% to $1.0928, with an intraday low of $1.0910.
On Friday, the euro dipped by 0.1% against the dollar, following profit-taking from its seven-month high of $1.1008.
Last week, the euro rose by 0.1%, marking its second consecutive weekly gain amid speculation about a shrinking interest rate differential with the US.
European Inflation
Recent data on European consumer prices for July exceeded expectations, signaling increased inflationary pressure on the ECB.
This data, coupled with assertive statements from Fed officials, has reduced the chances of further rate cuts in Europe this year.
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