The euro rose in European trade on Wednesday against a basket of major rivals, extending gains for the second straight session against the dollar and recovering from a five-month trough.

Recent European inflation data changed the odds of an ECB interest rate cut in July, as traders await more data this week to gather additional clues.

The odds of at least two US interest rate cuts this year surged after weak inflation data for April.

The Price

The EUR/USD price rose 0.15% today to $1.1201, with a session-high at $1.1179.

The pair rose 0.9% on Tuesday away from a five-week trough at $1.1065, and after weak US data.

European Rates

Recent eurozone data showed inflation rose past estimates in April, renewing inflationary pressures on the European Central Banks policymakers.

The data tanked the odds of an ECB interest rate cut in June from 60% to below 50%.

US Rates

Recent US inflation data missed estimates, showing reduced inflationary pressures on Fed policymakers.

Traders are now pricing in 50 basis points of US interest rate cuts this year, starting next September.

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