French Inflation Steady at 0.9% in July
On June 27, during the early Asian market hours, the USD/CHF currency pair stayed close to the 0.8000 mark. This level hasn’t been seen in over 10 years. The US dollar is still under pressure and is finding it hard to rise due to growing concerns about the Federal Reserve and upcoming trade decisions.
Stable inflation means there are no sudden changes in the cost of goods and services, which is good for both consumers and businesses. It also suggests that price growth is under control and far below the European Central Bank’s (ECB) target of 2%. This gives the ECB more flexibility to keep interest rates stable for now.
Energy prices remained mostly unchanged compared to last year, which helped prevent overall inflation from rising. Food prices saw only small increases, and the service sector had moderate price growth. Manufacturing and transport costs also stayed balanced, reducing pressure on the economy.
With inflation steady, traders expect the ECB to avoid immediate interest rate changes. This keeps the euro (EUR) relatively stable against other major currencies like the US dollar (USD) and British pound (GBP). Currency pairs such as EUR/USD and EUR/GBP are likely to see limited movement unless new economic data or political events shift market expectations.
If inflation in France and across the eurozone stays low, the euro may remain stable in the short term. However, unexpected rises in energy or food prices could change the ECB’s stance and move the currency markets.
Impact:
Stable inflation supports the euro by reducing uncertainty about interest rate changes. Low volatility in EUR pairs is likely unless new economic shocks occur.
