Euro Dollar Exchange Rate - EUR/USD at 1.08

The euro has rebounded above $1.07, attempting to recover from a low point of $1.0633 reached on May 31st, as investors digested the hawkish comments made by ECB President Lagarde and their implications for the future path of monetary policy.

Lagarde stated that Eurozone inflation remained too high, emphasizing the need for further monetary policy tightening by the ECB. Other policymakers, such as Vice-President Luis de Guindos and Bank of France governor Francois Villeroy de Galhau, mentioned that rate hikes were starting to impact inflation and upcoming interest rate increases would be minimal.

Data released on Thursday indicated a significant cooling of inflationary pressures in the Eurozone during May, supporting the view that the European Central Bank might reach its peak interest rates in September, earlier than previously forecasted for December.