August 2026 EU monthly news

Erste Bank Research Team Erste Bank

Europeans could soon be looking forward to a digital euro. MEPs have given their consent to negotiations with Member States. This is a significant step forward in a debate that has been ongoing since 2021.

Selected provisions of the Artificial Intelligence Act came into force in the EU on 2 August, which introduce a requirement to transparently label content generated or edited with AI.

The EU annual inflation was 2.9% in June 2026, down from 3.3% in May. A year earlier, the rate was 2.3%. The lowest annual rates were registered in Sweden (1.0%) and Czechia (1.1%). The highest annual rates were recorded in Romania (9.2%) and Lithuania (5.4%).

In June 2026, the prices of diesel decrease by 6.4% and petrol by 4.2% compared with May 2026. In May 2026, diesel had dropped by 5.8%, while petrol had registered a slight increase of 0.8% relative to April 2026.

On 1 January 2026, the EU population was estimated at 452.0 million inhabitants, 0.706 million more than the previous year. This was the fifth consecutive year of population growth in the EU, following a decline in 2021 during the COVID-19 pandemic.

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Erste Bank Research Team

Erste Bank

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AUD/USD flirts with 0.7000, lowest since early August amid bullish USD

AUD/USD hits a fresh low since early August during the Asian session on Friday and looks vulnerable near 0.7000 after breaking below the 200-day SMA overnight. Against the backdrop of the hawkish Fed, a two-day rally in oil prices revives inflation fears and continues to push US bond yields to multi-year highs. Adding to this, geopolitical risks lift the US Dollar to a two-month high, overshadowing RBA rate hike bets and weighing on the pair.

USD/JPY pulls back from three-week high after failing near 159.00

USD/JPY edges lower during the Asian session on Friday, stalling its recent strong move to a three-week high of 159.00 as Japanese Yen bears turn cautious amid intervention fears. Meanwhile, the US Dollar retains a strong bullish undertone as the Fed's hawkish outlook and oil-driven inflation fears continue to push US bond yields to multi-year peaks. Furthermore, the BoJ's dovish rate hike last week might cap JPY and support spot prices.

Gold consolidates below $4,300 amid hawkish Fed, higher bond yields, and bullish USD

Gold extends its consolidative price move, and languishes near the weekly low set the previous day amid a bearish fundamental backdrop. The US Dollar pauses for a breather following a strong rally to a nearly two-month high and offers some support to the commodity. However, the US Federal Reserve's hawkish outlook, elevated US bond yields, and persistent geopolitical uncertainties favor USD bulls.

Ripple, Cardano, Solana: ETF inflows and whale demand signal further rally

Ripple (XRP), Cardano (ADA), and Solana (SOL) continue to experience a steady recovery with double-digit gains so far this month. Ripple and Solana experience firm institutional demand, while the percentage of ADA supply in profit rises, underpinned by interest from large-wallet investors, commonly referred to as whales.

Treasury yields at 2007 highs

The combination of energy prices rising back above $100 a barrel, US PMI’s topping multi-year indexes and FOMC members taking tough tones when discussing future rate paths have all led Treasuries at both ends of the curve with higher yields. Treasury Notes account for close to 52% of all marketable Treasuries, so movements in yields are especially painful for the US fiscal outlook.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.