Anna 
In early European trading, the euro demonstrated resilience, with EUR/USD climbing 0.2% to reach 1.0872, as investors eagerly awaited crucial eurozone consumer inflation data slated for release later in the week.
Market sentiment surrounding the European Central Bank (ECB) remains dovish, with expectations mounting for an imminent interest rate cut. Policymakers reiterated this sentiment on Monday, reinforcing market speculation about potential monetary policy adjustments in the near future.
In a newspaper interview, ECB policymaker Francois Villeroy de Galhau affirmed the likelihood of a rate cut in the upcoming week, characterizing it as a “done deal.” This stance underscores the ECB’s flexibility and willingness to deploy monetary stimulus measures as needed, amidst prevailing economic uncertainties.
As anticipation builds for the forthcoming consumer price index (CPI) release on Friday, investors are poised to scrutinize the data for insights into inflation trends and potential policy implications. Economists project a modest uptick in eurozone inflation to 2.5% year-on-year for May, compared to 2.4% in April, with underlying inflation expected to remain stable at 2.7%.
Meanwhile, in the United Kingdom, GBP/USD experienced a slight uptick to 1.2770 amid a relatively subdued economic calendar as the election campaign gains momentum. Analysts note particular interest in any campaign pledges by Labour Party leader Keir Starmer, who currently leads in the polls by a significant margin. However, initial market reactions to Starmer’s campaign kickoff speech have been muted.
As investors navigate evolving political dynamics and economic indicators, market participants remain attuned to developments in both the eurozone and the UK, with upcoming data releases and political events poised to influence currency movements in the days ahead.
