Euro Steadies After ECB Holds Rates

2026-02-05 13:28 By Joana Ferreira 1 min. read

The euro traded around $1.18, after the European Central Bank left interest rates unchanged as expected.

The ECB reiterated that inflation is expected to stabilize at its 2% target over the medium term, while noting that the euro area economy remains resilient despite an uncertain outlook driven by global trade policy risks and ongoing geopolitical tensions.

At the ECB press conference, President Lagarde said the euro area inflation outlook remains in a “good place,” and downplayed the recent euro rally while warning that data may be volatile in the coming months and should not drive policy decisions in isolation.

She added that uncertainty is elevated due to a volatile global policy environment.

Separately, Eurostat data showed headline inflation eased to 1.7% yoy in January, matching expectations and marking the lowest reading since September 2024.

Core inflation also slowed to 2.2%, slightly below forecasts and the weakest since October 2021.



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