ECB Confidence Lifts Euro While US Signals Stay Mixed

Markets are navigating a mix of central bank signals and fresh economic data as policymakers balance growth risks with inflation pressures. The European Central Bank kept rates unchanged while signaling confidence in the inflation outlook, the euro found support from trimmed rate-cut bets, and technicals point to a constructive bias in EURUSD. Across the Atlantic, stronger US inflation and a sharp rise in jobless claims are adding to uncertainty ahead of the Federal Reserve’s September meeting.

ECB Holds Rates Steady as Inflation Nears Target

The European Central Bank (ECB) decided to maintain interest rates unchanged at its meeting on September 11. Inflation in the eurozone is close to the ECB’s 2% target, and its latest forecasts indicate that inflation is expected to remain around that level in the medium term. Economic growth is expected to improve slightly in 2025 before slowing a bit in 2026.

The ECB said it will continue making decisions one meeting at a time, based on incoming data, and is not committing to any specific path for future rate changes. For now, the main interest rates remain at 2.00%, 2.15%, and 2.40%. The bank also confirmed that its bond-buying programs are winding down as planned.

Lagarde: ECB in a “Good Place” as Growth Outlook Shifts

The European Central Bank’s decision to keep rates steady didn’t surprise investors. President Christine Lagarde said the bank is in a “good place” and noted that risks to growth have eased, with global trade tensions less of a concern than before.

Markets reacted by reducing bets on another rate cut, which gave the euro a lift. The ECB now expects the eurozone economy to grow 1.2% this year, but only 1% in 2026. While new US tariffs are hurting European exports, other parts of the economy, like jobs, are holding up well.

Technical Analysis

Since reaching a high of 1.18290 on July 1, the EURUSD has retraced over 3.5% before rebounding and reclaiming ground above the 20- and 50-period Exponential Moving Averages.

Technical indicators support the constructive outlook: the Momentum Oscillator has crossed above its 100 baseline, signaling strengthening upside pressure, while the Relative Strength Index (RSI) holds above 50, pointing to sustained buying interest.

If the current technical structure remains intact, upside objectives sit at 1.18290, followed by 1.19311 and 1.20331. Conversely, a deterioration in momentum or sentiment could shift focus toward support at 1.16936, 1.15734, and 1.13906.

August CPI Rises, Keeping Pressure on Fed

US consumer prices rose faster in August, climbing 0.4% after a 0.2% increase in July. Over the past year, prices have been up 2.9%. The biggest drivers were housing, food, and gasoline. Food prices jumped 0.5% in August, while gas rose nearly 2%. Core inflation, which excludes food and energy, also increased 0.3% for the month and 3.1% over the year.

US Jobless Claims Jump to Highest Since 2021

New US jobless claims rose sharply to 263,000 in the week ending September 6, the highest level since October 2021. That’s 27,000 more than the week before. The four-week average also climbed to 240,500, pointing to a cooling job market. Meanwhile, continuing claims — the number of people still receiving unemployment benefits — held steady at about 1.94 million, leaving the insured unemployment rate unchanged at 1.3%.

Conclusion

Overall, the euro has found support from the ECB’s steady stance and easing growth risks, while technicals point to further upside potential in EURUSD. In contrast, the US faces a more complicated backdrop, with inflation running hotter and jobless claims rising to multi-year highs. With both economies sending mixed signals, upcoming data and central bank decisions will be key in shaping market direction in the weeks ahead.