The euro rose in European trading on Thursday against a basket of global currencies, holding above its six-week low versus the US dollar and heading for its first daily gain in four sessions. The rebound came as traders bought from recent lows and optimism grew over a potential resolution to Frances political crisis, with President Emmanuel Macron reportedly close to naming a new prime minister.

Amid renewed inflationary pressures facing European Central Bank (ECB) policymakers, expectations for further interest-rate cuts this year have weakened. Investors are now awaiting additional economic data and comments from ECB officials to reassess those odds.

Price Overview

Euro exchange rate today: The euro rose around 0.2% to $1.1648, from an opening level of $1.1628, after touching a session low of $1.1619.

On Wednesday, the euro fell 0.25% against the dollarits third loss in four dayshitting a six-week low of $1.1598 amid continued political uncertainty in France.

US Dollar

The US Dollar Index slipped 0.15% on Thursday, retreating from a two-month high of 99.08 points, and heading for its first loss in four sessions, reflecting a pause in the dollars recent rally against major and minor peers.

Beyond profit-taking, the latest Federal Reserve meeting minutes reinforced expectations for at least two additional rate cuts by the end of this year.

A New French Prime Minister

Outgoing Prime Minister Sbastien Lecornu said President Macron could nominate a new prime minister within 48 hours a move seen as a swift attempt to contain the political turmoil following the collapse of Frances short-lived government just hours after it was formed.

These developments come at a delicate time for European markets, as political instability in Paris has raised investor concerns about the outlook for Macrons economic reforms. The lyse is now seeking to form a government capable of securing parliamentary confidence and easing domestic tensions.

European Interest Rates

Data last week showed eurozone inflation rising in September in line with forecasts, underscoring persistent price pressures on ECB policymakers.

Following that data, money-market pricing for a 25-basis-point ECB rate cut in October has stabilized below 10%.

Traders have scaled back bets on further monetary easing, suggesting that the ECBs current rate-cutting cycle may be over for this year.

According to sources, ECB officials believe no additional rate cuts are needed to achieve the 2% inflation target, despite new projections pointing to lower rates over the next two years.

The same sources indicated that unless the eurozone faces another major economic shock, borrowing costs are expected to remain at current levels for some time.