EURUSD ticks down as ECB confirms reaching inflation target 📌 🇪🇺

EURUSD pulls back by nearly 0.1% following the release of the ECB's updated inflation forecasts.

According to the latest survey, the inflation forecast was revised down by 0.2 percentage points for both 2025 (from 2.2% to 2%) and 2027 (from 2% to 1.8%). Additionally, it was estimated that tariffs would contribute to a marginal decline in inflation of 0.06% in the years 2025–2026, with no significant long-term impact.

The absence of notable deflationary pressure is expected to shift the ECB’s focus toward risks of weak economic growth, although it's worth noting that unlike the Fed, the ECB does not have a dual mandate—its sole objective is price stability.

ECB’s Gediminas Šimkus also addressed the inflation target, stating that “inflation is expected to remain at 2% in the medium term.” The latest forecast therefore confirms that the ECB is comfortable with the current price level, although an adverse tariff scenario could trigger a renewed push for rate cuts.

EURUSD has retreated below the 30-hour exponential moving average (EMA30, light purple). Source: xStation5