Eurozone economic growth has stalled, with preliminary data revealing a GDP increase of just 0.1% quarter-over-quarter for Q1 2026, falling short of the 0.2% forecast. Inflation metrics showed a Consumer Price Index (CPI) of 3% year-over-year in April, aligning with expectations, while core CPI remained stable at 2.2%. The unemployment rate held steady at 6.2%, reflecting a lack of significant labor market changes.

This stagnation in growth and stable inflation data is keeping the EURUSD exchange rate steady around 1.1680, as investors await the European Central Bank’s (ECB) monetary policy decision. The absence of new inflation signals has resulted in low volatility, but market participants anticipate a shift following ECB President Christine Lagarde’s post-decision remarks, particularly regarding potential interest rate hikes.

As the ECB prepares to meet, the key takeaway for market professionals is to monitor Lagarde’s comments closely, as any indication of tightening monetary policy could lead to increased volatility in the Euro and broader financial markets.

Source: xtb.com