By Boluwatife Oshadiya

Copyright bizwatchnigeria

The euro advanced to $1.17 against the U.S. dollar on Thursday, buoyed by a broader dollar retreat following fresh U.S. inflation and unemployment data that reinforced expectations of interest rate cuts from the Federal Reserve later this year.

The greenback came under renewed pressure after the Bureau of Labor Statistics (BLS) reported that the U.S. Consumer Price Index (CPI) rose by 0.4% in August on a monthly basis, pushing annual inflation to 2.9% from 2.7% in July. The increase was largely attributed to rising housing and energy costs.

While stronger inflation data often fuels uncertainty over the Fed’s policy stance, market analysts noted that Chair Jerome Powell may prioritize labor market indicators in determining the timing of monetary easing.

Meanwhile, the European Central Bank (ECB) opted to keep interest rates steady during its policy meeting on Thursday, while presenting revised projections for the eurozone economy.

According to the ECB, euro area GDP is now expected to expand by 1.2% in 2025, an upward revision from the June forecast of 0.9%. Projections for 2026 were trimmed to 1.0%, while the 2027 outlook held steady at 1.3%.

Officials stressed that monetary policy decisions will remain data-driven, balancing steady inflation, low unemployment, resilient growth, and global trade headwinds.

Commenting on the ECB’s stance, ING economists highlighted “a summer marked by several encouraging developments—from a limited U.S.-EU trade deal to solid Q2 GDP figures, improving business sentiment, and a modest inflation pickup—justifying a wait-and-see approach.”