Euro underperforms amid doubts over further ECB rate hikes through year-end

Euro Price Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the New Zealand Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.20%	0.15%	0.24%	0.17%	0.03%	-0.15%	0.19%
EUR	-0.20%		-0.04%	0.04%	-0.07%	-0.18%	-0.37%	-0.02%
GBP	-0.15%	0.04%		0.06%	-0.04%	-0.12%	-0.31%	0.02%
JPY	-0.24%	-0.04%	-0.06%		-0.08%	-0.23%	-0.39%	-0.07%
CAD	-0.17%	0.07%	0.04%	0.08%		-0.16%	-0.32%	0.00%
AUD	-0.03%	0.18%	0.12%	0.23%	0.16%		-0.16%	0.17%
NZD	0.15%	0.37%	0.31%	0.39%	0.32%	0.16%		0.32%
CHF	-0.19%	0.02%	-0.02%	0.07%	-0.01%	-0.17%	-0.32%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

In the monetary policy announcement this month, the ECB raised its policy rates by 25 basis points (bps) and warned of upside inflation risks in the wake of Middle East conflicts. However, the ceasefire announced between the United States (US) and Iran has pushed oil prices lower to pre-war levels, a scenario that could anchor global inflation expectations.

Earlier in the day, ECB policymaker and Dutch central bank chief Olaf Sleijpen said that falling energy prices after easing Middle East tensions would cool down Eurozone inflationary pressures.

However, other ECB officials, Pierre Wunsch and Joachim Nagel, have warned that inflationary pressures could remain above the 2% target for some quarters, citing that the Middle East situation is still very opaque.

Meanwhile, investors await the flash German Harmonized Index of Consumer Prices (HICP) data for June, which will be published at 12:00 GMT. Month-on-Month (MoM) HICP data is expected to arrive at 0.1% after declining at the same pace in May. On an annualized basis, the HICP growth is seen cooling down to 2.6% in June from the previous reading of 2.7%.

Earlier in the day, the HICP data of all six states of Germany showed that price pressures cooled down in all regions.

Going forward, investors will focus on the Eurozone preliminary HICP data for June, which will be released on Wednesday.

Economic Indicator

Harmonized Index of Consumer Prices (YoY)

The Harmonized Index of Consumer Prices (HICP), released by the German statistics office Destatis on a monthly basis, is an index of inflation based on a statistical methodology that has been harmonized across all European Union (EU) member states to facilitate comparisons. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is bullish for the Euro (EUR), while a low reading is bearish.