Ella 
In Asia on Wednesday, EUR/USD fluctuated around 1.0920. EUR/USD suffered some volatility on Tuesday, driven by February inflation data from Germany and the United States. German data was in line with expectations, while U.S. inflation data beat expectations.
The German Statistical Office reported an annualized rate of 2.7% for the Harmonized Consumer Price Index in February, in line with expectations. The Harmonized Consumer Price Index also remained unchanged at a monthly rate of 0.6% in February.
Francois Villeroy de Galhau, a member of the European Central Bank’s Governing Council, said that given the progress made in fighting inflation, there is a consensus within the European Central Bank to start cutting interest rates in the spring. Governing Council member Francois Villeroy de Galhau stressed the ECB’s ability to adjust interest rates independently, underscoring the institution’s pragmatic approach to interest rate policy.
Robert Holzmann, the president of the Bank of France, said in an interview with the news outlet Market News International that the European Central Bank is more likely to cut interest rates in June than in April. But amid high uncertainty, there is a need to see predictions confirmed. Pierre Wunsch, president of the National Bank of Belgium, told a news conference that the European Central Bank will have to gamble and cut interest rates soon, despite disturbingly high wage inflation and service price increases.
The U.S. dollar index (DXY) maintained its recent gains on the back of higher U.S. Treasury yields. Stronger-than-expected inflation boosted the dollar, reducing expectations for a near-term interest rate cut by the Federal Reserve and making the greenback stronger. This dynamic poses a challenge for the EUR/USD currency pair.
