With U.S. inflation likely to slow, the Federal Reserve is likely to slow the pace of rate hikes, which could provide some support for the euro.
Matthew Ryan, head of market strategy at Ebury, said another 75 basis point Fed rate hike is now seen as unlikely, which is at least a modest positive for the euro and risk assets in general, especially given expectations for the July 27 FOMC meeting There is about a three-quarters chance of a rate hike by this amount.
Inflation is likely to ease in the coming months as food and energy prices stop rising, and in some cases even fall.