ECB's de Cos: Risks to eurozone inflation outlook remain on upside and have intensified

Ross J Burland FXStreet

The European Central Bank Pablo Hernández de Cos is crossing the wires and has said that there are risks to the eurozone inflation outlook that remain on the upside and have intensified, ‘, particularly in short term’.

de Cos has stated that the risks include lasting deterioration of the economy in the eurozone, and persistently high energy & food prices.

''The ECB stands ready to adjust all instruments to ensure inflation stabilises at 2% medium-term target.''

Meanwhile, the comments follow the last meeting where the ECB announced its new Transmission Protection Instrument (TPI), which will let it buy bonds from indebted countries such as Italy to cap any excessive rise in their borrowing costs, helping limit financial fragmentation within the eurozone.

At 1.1027 vs. the greenback, the euro is under pressure as the week moves along with the prospect of another Russian gas supply cut. Russia said on Monday it would cut gas flows to Germany via the Nord Stream 1 pipeline to 33 million cubic metres per day (bpd) from Wednesday. That is half of the current flow, which is already only 40% of normal capacity. Additionally, risk-off sentiment has sent a bid into the US dollar, while US equities are pulled lower following a profit warning from retail giant WalMart which said it would slash prices to reduce inventory. EUR/USD is down 0.89% at the time of writing.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

GBP/USD weakens below 1.3250 as UK Prime Minister Keir Starmer resigns

The GBP/USD pair loses ground to near 1.3245 during the early Asian trading hours on Tuesday. Political uncertainty in the United Kingdom continues to weigh on the British Pound against the US Dollar. The preliminary readings of the S&P Global Purchasing Managers Index from both the US and the UK are due later on Tuesday.

Euro declines below 1.1450 on US-Iran peace deal uncertainty

The EUR/USD pair trades with mild losses around 1.1425. The US Dollar edges higher against the Euro amid risk-off sentiment and a hawkish Federal Reserve stance. Traders will keep an eye on the preliminary readings of the Purchasing Managers Index from Germany, the Eurozone, and the United States later on Tuesday.

Gold drops to nearly two-week low, seems vulnerable amid Fed hike bets, bullish USD

Gold adds to its Asian session losses, and drops to a nearly two-week low, around the $4,115 region in the last hour amid a bullish US Dollar. Despite positive signals from US-Iran peace talks, widespread skepticism remains toward a final deal. This helps the USD in preserving its recent strong gains to the highest level since May 2025.

Bitcoin holds steady as ETF outflows decline – DEXE and TIA extend gains

Bitcoin hovers above $64,000 at press time on Tuesday, holding steady after a roughly 4% drop last week. Data shows that institutional outflows are easing, suggesting broader market recovery potential, while DeXe and Celestia have emerged as frontrunners over the last 24 hours.

Big day of PMIs ahead

In the euro area, June flash PMIs are released. Most respondents will likely have answered after the US-Iran deal, yet the impact of lower oil prices is unlikely to already show up in activity data. We expect manufacturing to edge down to 50.9 (May: 51.6), while we expect services to see a modest improvement to 48.8 (May: 47.7).

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.