The EURUSD value dropped to $1.096 following new U.S. data. This data made investors rethink their belief that the Federal Reserve would cut interest rates soon. U.S. inflation rose to 3.4% in December, above the expected 3.2%. Also, fewer Americans applied for unemployment benefits than predicted. At the same time, European Central Bank (ECB) officials gave essential updates.
ECB Vice President Guindos mentioned a possible technical recession in late 2023 and expected a brief inflation pause in early 2024 due to energy prices. Additionally, Bank of France Governor Villeroy de Galhau stated the ECB might lower interest rates this year if inflation aligns with their 2% target.