The euro inched down in European trade on Wednesday against a basket of major rivals, expanding losses for the second straight session and moving away from a six-week high on profit-taking amid risk aversion ahead of the European Central Banks policy meeting.

As inflation in the eurozone dropped below the 2% target in May, it bolstered the odds of an ECB interest rate cut this week, for the seventh straight meeting.

The Price

The EUR/USD fell 0.1% today to $1.1365, with a session-high at $1.1393.

The euro closed down 0.6% on Tuesday against the dollar on profit-taking away from a six-week high at $1.1454.

The euro fell after eurozone data showed inflationary pressures receded more than expected last month.

European Inflation

The eurozone consumer prices rose 1.9% y/y in May, below estimates of 0.2%, and down from a 2.2% rise in April.

core prices, excluding food and energy, rose 2.3%, below estimates of 2.4%, and down from 2.7% in the previous reading.

ECB

The European Central Bank is convening today and tomorrow to discuss the latest economic developments in the eurozone, and is widely expected to cut rates by 25 basis points to 2.15% to October 2022 lows.

Markets are waiting for clues that the ECB will carry on its policy easing path throughout the year with more interest rate cuts.