The euro rose in European trade on Thursday against a basket of major rivals, expanding gains for the fourth straight session against the US dollar and hitting a two-month high amid a strong outlook for more gains as the odds of an ECB rate cut in July diminished.

US inflation missed estimates in May, reducing pressures on the Feds policymakers and boosting the odds of a September rate cut.

The Price

The EUR/USD price rose 0.45% to $1.1539, an April 22 high, with a session-low at $1.1483.

The euro rose 0.5% on Wednesday against the dollar, marking the third profit in a row following US inflation data.

European Rates

ECB President Christine Lagarde hinted at the possible end of the current cycle of policy easing, which was in response to a combined shock such as the Covid 19 pandemic, the Ukrainian war, and the energy crisis.

According to a Reuters source, most ECB members now aim at holding interest rates unchanged in July, with the global markets now expecting just an additional 25 basis points of rate cuts by the end of the year.

The odds of a 0.25% ECB rate cut in July now stood below 30%, with traders awaiting more eurozone data and remarks by ECB officials to gather more clues.

US Rates

Recent data showed US inflation rose less than expected in May, with limited effects so far for Trumps tariffs on prices.

Following the data, traders raised their estimates for a Federal Reserve rate cut in September.

Now traders await US producer prices data later today to gather even more clues.