Euro hits 2025 high as ECB signals end to cuts | FX Research

The US dollar has extended declines in the aftermath of Wednesday's softer US CPI print. Interestingly enough, the data has failed to inspire much confidence in risk assets—presumably due to distractions around the escalation in geopolitical tension in the Middle East.

President Trump's push for unilateral tariffs within two weeks ahead of the July 9th deadline has also added pressure, while Japan's PMIA noted persistent trade tensions with the US.

The FX market has also been selling US dollars due to tariff-related risks, with the euro outperforming. The euro has not only extended to a fresh yearly high but has traded up to its highest level against the dollar since October 2021.

ECB officials, including Schnabel and Lagarde, signaling that interest rate cuts may soon end, has only added to the euro bid.

Despite weak UK data, including a negative 0.3% GDP drop, the pound has also been better bid.

Upcoming US producer prices and jobless claims data are now in focus.